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Bitcoin will drive innovation in cheaper energy sources faster than any amount of carbon tax could hope to achieve. Miners revenue can only decline as the bloc

Bitcoin will drive innovation in cheaper energy sources faster than any amount of carbon tax could hope to achieve. Miners revenue can only decline as the block subsidy halves, as more miners participate in the network and the difficulty increases. The miners themselves have only one major expenditure, which is electricity used to run the mining hardware and the cooling equipment. This means that for miners to continue to increase their profits, the single most effective solution for them is to invest some of their profits into the creation of renewable, low maintenance energy solutions. Since those miners will be able to run their equipment from renewable, cheaper energy, the remaining miners who are using expensive biofuels will end up unprofitable and be put out of business. Eventually, the competition in mining will be driven entirely by who can generate the cheapest and most abundant source of renewable electricity, for which they will want to acquire the intellectual property rights because they don't want to hand it to their competition. A highly competing clean energy market is what is needed to push innovation. The main problem we have now is that clean energies are just not competitive enough. They usually need subsidizing by governments. That practice is simply not sustainable, because eventually the subsidies will dry up and they'll be back to being more expensive than biofuels.

pizza 8y ago
If I'm understanding you correctly, you seem to imply that miners will invent wholly new energy technologies because they want to be first to market with a no-brainer solution for cheap, and essentially passively-profitable, green AND long-term-sustainable energy. Don't you think that the need for that already exists not just in the bitcoin world, but for anyone, anywhere who needs electricity? That if they could develop such a product it would already be many times the value of all crypto markets combined? Not to mention they'd probably decrease in value with cheaper energy. Your optimism is something to admire but I think energy seems to be an industry that is not lacking in smart people already driven by the rush to be first to market with a comparative advantage. Maybe I'm wrong, if so, I'd like to know it!
- sparkie 8y ago
  I'm not suggesting that miners will invent new solutions themselves. I'm suggesting that they will put some of their profits towards research and development of new solutions, and they will acquire promising startups to cut out costs. The need for cheaper electricity exists, but it's not clear where and when investors can make money. People aren't going to put their money into something that might bear fruit 10-20 years down the line, when there are many other investment opportunities available which have more promise of larger, or quicker profits. The bulk of the investment into clean energies comes from (or is subsidized by) governments who are notoriously bad with money. There's a limited market and it is not very competitive because they're not even able to compete with oil without subsidies. Having smart people is simply not enough. You need smart people who are willing to risk their own money to achieve their goals. Most academics are risking other people's money, which is why socialism does not work and capitalism produces the results.
  - andirk 8y ago
    Miners use energy for their ASICs and whatever else the algorithms of the coins need. We are seeing innovations in chips. I can imagine there is or will be innovation in decreasing energy usage of said chips. For example, a chip that can't melt doesn't have a cooling cost. But a global solution to cheaper and cleaner energy is probably the #1 way to rule the world if you can figure out how.
    - sparkie 8y ago
      Chips will get better, but we're approaching the limit of Moore's Law in terms of shrinking them to get the exponential gains we've seen over the past half century. The improvements in Hash/W are going to continue to slow until they're not worth the additional cost to fabricate. (Unless some radically new transistor technologies arise) My assumptions about the cost of mining were assuming that one can count the cost of the mining chip as negligible, which is certainly not the case now, but I believe will be the case in future as the chips get much cheaper, much more abundant and the period between iterations of the chips increases. Industrial miners will use the most efficient chips on the market, but their primary cost will be the electricity.

pizza 8y ago

If I'm understanding you correctly, you seem to imply that miners will invent wholly new energy technologies because they want to be first to market with a no-brainer solution for cheap, and essentially passively-profitable, green AND long-term-sustainable energy. Don't you think that the need for that already exists not just in the bitcoin world, but for anyone, anywhere who needs electricity? That if they could develop such a product it would already be many times the value of all crypto markets combined? Not to mention they'd probably decrease in value with cheaper energy. Your optimism is something to admire but I think energy seems to be an industry that is not lacking in smart people already driven by the rush to be first to market with a comparative advantage. Maybe I'm wrong, if so, I'd like to know it!

sparkie 8y ago
I'm not suggesting that miners will invent new solutions themselves. I'm suggesting that they will put some of their profits towards research and development of new solutions, and they will acquire promising startups to cut out costs. The need for cheaper electricity exists, but it's not clear where and when investors can make money. People aren't going to put their money into something that might bear fruit 10-20 years down the line, when there are many other investment opportunities available which have more promise of larger, or quicker profits. The bulk of the investment into clean energies comes from (or is subsidized by) governments who are notoriously bad with money. There's a limited market and it is not very competitive because they're not even able to compete with oil without subsidies. Having smart people is simply not enough. You need smart people who are willing to risk their own money to achieve their goals. Most academics are risking other people's money, which is why socialism does not work and capitalism produces the results.
- andirk 8y ago
  Miners use energy for their ASICs and whatever else the algorithms of the coins need. We are seeing innovations in chips. I can imagine there is or will be innovation in decreasing energy usage of said chips. For example, a chip that can't melt doesn't have a cooling cost. But a global solution to cheaper and cleaner energy is probably the #1 way to rule the world if you can figure out how.
  - sparkie 8y ago
    Chips will get better, but we're approaching the limit of Moore's Law in terms of shrinking them to get the exponential gains we've seen over the past half century. The improvements in Hash/W are going to continue to slow until they're not worth the additional cost to fabricate. (Unless some radically new transistor technologies arise) My assumptions about the cost of mining were assuming that one can count the cost of the mining chip as negligible, which is certainly not the case now, but I believe will be the case in future as the chips get much cheaper, much more abundant and the period between iterations of the chips increases. Industrial miners will use the most efficient chips on the market, but their primary cost will be the electricity.