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Nobody is forcing anyone to build mining rigs and pay to power them. To the extent that there are environmental externalities to Bitcoin mining, they are the re

by ttul 9y ago

Nobody is forcing anyone to build mining rigs and pay to power them. To the extent that there are environmental externalities to Bitcoin mining, they are the result of improper pricing on these externalities - such as a lack of a carbon tax in many places. If the energy required to mine BTC costs more than the value generated, miners stop mining. Tax the externalities properly and there is no environmental problem here.

jsmthrowaway 9y ago
You think energy should be taxed more and cost more because of Bitcoin’s value? Am I reducing that argument correctly?
- kaffeemitsahne 9y ago
  Either the negative externalities of energy consumption are included in the energy price, or they aren't. Bitcoin is just bringing this point to light.
  - jsmthrowaway 9y ago
    So, that’s a yes, then? Coming from Bitcoin, the harbinger of free marketry, her proponents calling for additional taxes to be levied upon energy to help unfree a market is a bit odd. “We made this thing which consumes about as much energy as Serbia on an international scale, and is very likely in the running for the most expensive computation on the planet. It’s designed incredibly inefficiently to brute force through SHA2 in 30MW+ space heaters around the world because we believe centralization is Evil, but now that what it makes is valuable, we can deflect criticism of its energy consumption to the pricing of the electricity markets. Raise the price of energy to stop us. What’s that? A lot of people already can’t afford electricity?” It’s OK to admit Bitcoin is inefficient.
    - crazygringo 9y ago
      You're setting up a complete straw man. Believing in benefits of an international, decentralized currency in no way implies you're against taxation or higher taxes. Free markets don't exist in a vacuum. Taxes pay for all the institutions that enable free markets -- including but not limited to law, enforcement of contracts, and especially (hopefully) the proper accounting of externalities.
- tree_of_item 9y ago
  No, not because of Bitcoin's value.
- eat_veggies 9y ago
  Here's the econ 101 supply/demand graph of GP's argument: https://i.imgur.com/jhQi1yK.png https://i.imgur.com/jhQi1yK.png Right now, the miners have an incentive to mine more than is socially optimal because the impact on the environment (the externality) doesn't affect their profits. If you add a tax such that the cost to mine bitcoins matches the cost to society, the market will restructure itself to produce the socially optimal amount.
abalone 9y ago
Well, they are not and rarely have been in most polluting industries. “Improper pricing” is a rather disarmingly technocratic way of characterizing global warming. Bottom line we’ve got to curb greenhouse gas emissions, now.
hn_throwaway_99 9y ago
You are correct, but does that change the conclusion? The externalities on energy production have never been appropriately priced, and recent political history of the world has convinced me that won't change any time soon. The only real hope is technological change, for example battery technology being more economic than gas powered vehicles. The current implementation of Bitcoin is a technology that takes us in the other direction.
tstactplsignore 9y ago
>Tax the externalities properly and there is no environmental problem here. If the people who always say "tax the externalities" were ever actually leading the political charge to do so, I'd be much more sympathetic. Instead it always seems to be a gas lighting move in bad faith, where on one hand it's "easy problem, it's all externalities!" and with the other hand they're the people fighting tooth and nail against the environmental regulations and taxes we so desperately need.

by ttul 9y ago

jsmthrowaway 9y ago

You think energy should be taxed more and cost more because of Bitcoin’s value? Am I reducing that argument correctly?

kaffeemitsahne 9y ago
Either the negative externalities of energy consumption are included in the energy price, or they aren't. Bitcoin is just bringing this point to light.
- jsmthrowaway 9y ago
  So, that’s a yes, then? Coming from Bitcoin, the harbinger of free marketry, her proponents calling for additional taxes to be levied upon energy to help unfree a market is a bit odd. “We made this thing which consumes about as much energy as Serbia on an international scale, and is very likely in the running for the most expensive computation on the planet. It’s designed incredibly inefficiently to brute force through SHA2 in 30MW+ space heaters around the world because we believe centralization is Evil, but now that what it makes is valuable, we can deflect criticism of its energy consumption to the pricing of the electricity markets. Raise the price of energy to stop us. What’s that? A lot of people already can’t afford electricity?” It’s OK to admit Bitcoin is inefficient.
  - crazygringo 9y ago
    You're setting up a complete straw man. Believing in benefits of an international, decentralized currency in no way implies you're against taxation or higher taxes. Free markets don't exist in a vacuum. Taxes pay for all the institutions that enable free markets -- including but not limited to law, enforcement of contracts, and especially (hopefully) the proper accounting of externalities.
tree_of_item 9y ago
No, not because of Bitcoin's value.
eat_veggies 9y ago
Here's the econ 101 supply/demand graph of GP's argument: https://i.imgur.com/jhQi1yK.png https://i.imgur.com/jhQi1yK.png Right now, the miners have an incentive to mine more than is socially optimal because the impact on the environment (the externality) doesn't affect their profits. If you add a tax such that the cost to mine bitcoins matches the cost to society, the market will restructure itself to produce the socially optimal amount.

abalone 9y ago

Well, they are not and rarely have been in most polluting industries. “Improper pricing” is a rather disarmingly technocratic way of characterizing global warming. Bottom line we’ve got to curb greenhouse gas emissions, now.

hn_throwaway_99 9y ago

You are correct, but does that change the conclusion? The externalities on energy production have never been appropriately priced, and recent political history of the world has convinced me that won't change any time soon. The only real hope is technological change, for example battery technology being more economic than gas powered vehicles. The current implementation of Bitcoin is a technology that takes us in the other direction.

tstactplsignore 9y ago

>Tax the externalities properly and there is no environmental problem here. If the people who always say "tax the externalities" were ever actually leading the political charge to do so, I'd be much more sympathetic. Instead it always seems to be a gas lighting move in bad faith, where on one hand it's "easy problem, it's all externalities!" and with the other hand they're the people fighting tooth and nail against the environmental regulations and taxes we so desperately need.