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It’s a simple equation: So long as there is more money in mining BTC than there is cost in energy to mine it, mining will proceed. No entity in the world can c

• deleted 5y ago
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• px43 5y ago
  Mining difficulty tends to be a lagging indicator of price, not the other way around. I doubt that a price increase in power would have much affect on the price of the currency itself. We 100% need massive carbon taxes right now. It's really telling how the energy industry is trying to push blame to consumers, especially cryptocurrency miners, in order to distract from the discussion of real carbon taxes to force polluters to pay for the damage they're causing. I'm sure I'm one of the largest supporters of cryptocurrency in this thread so far, and I'm perfectly comfortable stating the obvious that mining with fossil fuels is an abomination. It's going to keep happening though until regulators get serious about reigning in the fossil fuel industry.
  • paulgb 5y ago
    Would you support a carbon import tariff for PoW cryptocurrencies mined outside of countries that implement a carbon tax? Because otherwise I can just imagine mining moving to countries without one, as is already happening with regards to other climate-based restrictions.
    • Avamander 5y ago
      They can move, but that undermines confidence of the blockchain because then it's under the influence of fewer governments. Which makes me think that quite a few wont.
      • Kbelicius 5y ago
        Isn't majority of bitcoin mining done in China? If so then we can safely conclude that the people don't care under whose influence it is.
        • paulgb 5y ago
          And even if they do, no miner individually has an incentive to do what’s best for the collective.
• caf 5y ago
  An increase in energy price wouldn't (in equilibrium) affect the Bitcoin price - it would affect the Bitcoin block difficulty, requiring less energy to mine the blocks (the mechanism being that miners unprofitable at the new energy price are driven out).
• ayngg 5y ago
  To me it seems like Bitcoin (and other pow cryptocurrencies) are almost like the climate change scapegoat for a number of social and economic issues that have seemingly come to a head recently to facilitate their rise. People mine because it is expensive, it isn't the other way around, so the real questions we should be asking in good faith are things like "Why it is profitable in the first place?" and I think it is probably related to other questions like why have the greater financial markets become so wonky, why has the behavior of investors changed so radically (GME et al), why have politicians been unable to be effective policymakers for decades, and why many institutions, both social and political in nature, appear to have become less trustworthy in the eye of the greater public? These are some of the questions among others which I think probably provide a better understanding of what is happening than the overly simplistic 'ponzi scam' explanation that has been repeated ad nauseam since its inception. Bitcoin is just one of many things (pretty much everything) that have been able to use energy profitably, while subsidizing the costs by externalizing them via climate change, that part isn't new. People get too caught up on bitcoin because it is new and nobody understands it (not just from a technical perspective), so it is really easy to dismiss. Singling it out in that manner seems silly.
  • caf 5y ago
    I don't think the criticism is exactly wrong, but it's more like Bitcoin mining is the reductio ad absurdum exposing the waste of resources that goes into gold mining (yes, there's some industrial uses, but that is a rounding error compared to the quantities that are dug up, purified, cast into bars, shipped around the world and buried back underground in vaults).
    • arcticbull 5y ago
      About half is used for jewelry because gold is shiny pebbles. About 10% is used for electronics. Mining Bitcoin consumes 5X as much energy as gold, btw, per unit value extracted. It also requires mining gold to produce the circuit boards used for mining Bitcoin - given the popularity of the ENIG immersion gold plating process for PCB contacts. The secondary issue is that of course each Bitcoin transaction generates 100g of e-waste which cannot be recycled and just gets buried. E-waste has a few grams of metals, but is mostly plastic and FR4 (epoxy filled fiberglass). Plastic and FR4 cannot be recycled. What little of the e-waste can be recycled is shipped to third-world countries where poor people dig through piles of scrap and dunk it in toxic chemicals. The only meaningful way to move forward is to reduce consumption, especially consumption which achieves nothing, like literally wiring up a power plant to compute hashes of random data instead of attaching it to the grid to do useful things. What a disaster.
• whywhywhywhy 5y ago
  > I think we need a carbon tax I get the concerns for the carbon issue of Bitcoin but I don't see why the solution should be governments profiting more from it.
  • abraae 5y ago
    Carbon tax is unusual in that it has a major benefit simply by suppressing consumption. If an alien civilization invaded earth and imposed a carbon tax, and took all of the proceeds back to their own planet, then we would still be better off.
  • adrianN 5y ago
    Typically proponents of a carbon tax also support a carbon dividend.
  • triceratops 5y ago
    Governments don't have to profit from it. In fact to get the desired effect (less carbon) the tax should be revenue neutral. It should be used to fund UBI or give everyone a tax credit.
• jariel 5y ago
  "No entity in the world can control the price of crypto." If it were banned in the US/EU the price would crash. Most major BTC backers have a lot of money and they can't be involved in something that is illicit. For regular citizens, it's just not worth the risk. That leaves quite a lot of people to play with it, but not enough to maintain the price. Without constant headlines, Tesla's involvement, Coinbase IPO headlines etc. the price would suffer quite a lot. It would maintain some price but not so much that people would be buying energy sources.
  • ArkanExplorer 5y ago
    Turkey - a minor economy - was able to crush the price of BTC by 15% with their recent ban. A large economy doing the same could have a major effect on price. Energy and hardware use is directly aligned with price. If there are any Governments out there who desire to fight climate change - and it seems like there are a reasonable amount - then illegalising proof-of-work coins seems like a reasonable step at least from an energy use perspective.
• EdwinLarkin 5y ago
  That's absurd. >I think we need a carbon tax, that is specifically a financial disincentive towards any means of energy production that directly pollutes the atmosphere. Ok then lets end 2 biggest industries that pollute the planet the most. Construction and food production. We can live in environmentally friendly uniform grey boxes and eat protein bars.
• Vinnl 5y ago
  > what are the current best arguments against levying such a disincentive? I think the biggest hurdle is that it is a tragedy of the commons: the entire market needs it, not just a single country...
• kolinko 5y ago
  The growth in supply would not slow - in Bitcoin every two weeks you have a rebalancing of difficulty, so if miners have less hashing power the difficulty of producing each block gets lowered to keep the supply stable.
  • skybrian 5y ago
    Sure, but energy usage still goes down. Revenue from block rewards is limited. Costs can’t exceed revenue or unprofitable miners will drop out. More money spent on one expense (the carbon tax) would mean less can be spent on the electricity itself. Or more likely they’re outcompeted by anyone who doesn’t have to pay the tax, such as miners using green energy or in a jurisdiction without the tax.
• skybrian 5y ago
  A carbon tax would be great, but I don’t know why you think governments couldn’t significantly discourage holding cryptocurrency? A wealth tax on proof-of-work currencies would discourage legitimate businesses (that don’t cheat on taxes) from holding them.
  • arcticbull 5y ago
    Well that's fine, no legitimate businesses hold them. Seriously. Your suppliers are paid in dollars, your tax burden is in dollars based on the conversion price on receipt. To hold them on receipt is wildly irresponsible speculation, as a business.
    • DennisP 5y ago
      I don't know whether you consider Tesla a legitimate business but they're holding bitcoins. https://www.thestreet.com/crypto/bitcoin/tesla-up-1-billion-on-bitcoin-purchase https://www.thestreet.com/crypto/bitcoin/tesla-up-1-billion-...
      • 12elephant 5y ago
        Also Time Magazine: https://www.thestreet.com/crypto/bitcoin/time-magazine-to-hold-bitcoin https://www.thestreet.com/crypto/bitcoin/time-magazine-to-ho...
        • arcticbull 5y ago
          Legacy media is a tough business. GBTC is paying Time in crypto produce shill content.
      • arcticbull 5y ago
        I consider Elon to be a troll, who's messing with people. He's named his CFO "Master of Coin".
      • HWR_14 5y ago
        Tesla (and Time) hold them as a speculative asset. Keeping a percentage of a corporate treasury in bitcoin is speculation, but possible a reasonable one. Allowing the mixture of funds that people opt to pay you in to determine your corporate allocation of assets seems a bit careless.
• arcticbull 5y ago
  > No entity in the world can control the price of crypto. Paolo Ardoino would like a word with you.
• Nursie 5y ago
  The supply of Bitcoin is fixed, energy prices don’t feed back that way.
• hannob 5y ago
  We know since many decades that a carbon price might be a good idea. But it's not that simple, because either you do it worldwide or you introduce lots of exceptions or you do something like carbon import tariffs (which the EU wants to do, but I think no such mechanism exists anywhere in the world right now). Bottom line is: Most of the world has no carbon price, and the places that do have one (e.g. the EU ETS) there are so many loopholes that it is not very effective. It's not that it isn't worth trying to do better, but a carbon price is definitely not a short term solution. So I'm inclined to think whoever proposes a carbon price as "the one true solution" really doesn't want a solution at all.
  • prussian 5y ago
    I don't think it helps that carbon isn't the be-all, end-all in the polluting effects of general consumption (including crypto mining). Even if all these miners were 100% green energy, the green tech would still be a net pollution on the world. I wish we stopped thinking of things so simply.
  • ganafagol 5y ago
    The age of the proposal for carbon tax mirrors the age of sophisticated "reasons" why it should not happen or why it's supposedly not a good idea "if you think about it". Nonsense. It's lobbyism. In more drastic terms, corruption. Plain and simple. We can have this "discussion" once significant industrial nations have implemented a carbon tax. Until then, it's all just excuses. Similar to all the bunch of nonsense people come up with why they can't start working out today or save money today or go to bed right now instead of after watching the next episode of whatnot-series.
  • throwaway346434 5y ago
    It already worked in Australia until conservatives and vested interests ran an aggressive media campaign, facilitated by Newscorp. Emissions dropped. Consumers didnt notice a hike in prices, or where they did, switched.
• johnchristopher 5y ago
  > I think we need a carbon tax I think we need a carbon quota. Something grounded in the hard reality, not a tax you can bypass or finance indefinitely with a money printing machine (edit: or bitcoin :).
• tiku 5y ago
  The price of bitcoin will only rise if it's more pricey to mine. Miners will never (or almost never) sell their new bitcoins against a lower price than they invested.
  • drexlspivey 5y ago
    No it won’t, miners that are mining at a loss would just stop mining which would make the difficulty to drop.
• jstanley 5y ago
  > if energy were priced correctly ... would BTC become higher in value? ... If energy were to become more expensive, the growth in supply would slow. It doesn't work like that. The consensus algorithm targets 1 block mined every 10 minutes. If the amount of energy expended goes up (i.e. blocks are mined more frequently) then the difficulty increases to counteract it. If the rate of block production decreases, then the difficulty decreases to counteract it. This page has more information: https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty (I've used "difficulty" here in the English-language way. Confusingly, "difficulty" is kind of backwards in Bitcoin - the "difficulty" is a number that a mined block hash must be below - it gets more "difficult" to mine a block if the "difficulty" number is lower. Maybe it should be called "easiness" instead of "difficulty").
  • ziml77 5y ago
    And this is exactly the problem with Bitcoin. Adding more computational power to the network changes absolutely nothing in terms of the amount of mining completed per unit time. Instead it just shuffles around the chances of being the one to succeed at a block. This is something that I'm not sure many people actually understand. Because in the physical world, increasing your energy input into mining will result in more output of the resource you're mining. Adding another excavator to your mine doesn't reduce the effectiveness of every other excavator in the world.
    • Siira 5y ago
      It directly increases the difficulty of doing a 51% attack.
    • ChrisClark 5y ago
      Yeah, the only point of the mining system is to secure the blockchain. As more and more energy is spent on it, the more energy is needed to attack it. It just turns greed into security. As long as it's profitable to mine, it's practically impossible for someone to do a 51% attack.
• ekianjo 5y ago
  > I think we need a carbon tax, that is specifically a financial disincentive towards any means of energy production that directly pollutes the atmosphere. Then by all means lets ban video games which are an extreme waste of electricity polluting the atmosphere for no good reason. You see how this reasonning can go?
  • throwaway939321 5y ago
    Video games don't produce any electricity. The idea is to disincentive electricity production.
    • savingisbadnow 5y ago
      Yes thats right. The more energy the world has the worse our lives are, people should keepliving in extreme poverty so we can stop climate change. We should actually reduce most of our energy use and on elect throwaway939321 as a world dictator to decide what we should use energy for and what not.
    • machiaweliczny 5y ago
      Then people will switch to producing energy at home via sonar panel, disel engines etc. illegally, or some countries will just allow it and get rich (see corporate tax for similar mechanism)
  • iso1631 5y ago
    Let say carbon tax of $200/ton, or 20c/kg. US co2 generation on the grid is about 0.5kg per kwH, so would add 10c/kWh. That means that your PS5, using 200 Watts, costs an extra 2c per hour to play -- on top of the existing 15c/hr for normal electric costs. A single bitcoin transaction of 780kWh would cost $78 and a transatlantic flight about $300, or $1.20 to a gallon of gas. Make the tax $2k/ton, it raises your PS5 cost from 15c/hr to 25c/hr and a bitcoin transaction to $780 and take transatlantic flights back to the cost of the 70s That sounds fine to me. The energy used by a PS5 is insignificant. > You see how this reasonning can go? Yes I do, it sounds really exciting. The money raised would be spent on carbon reduction (which gives a financial incentive to Brazil to not chop down rainforest, or pays for other forms of carbon capture), and disincentivises carbon usage. Brilliant.
• carlsborg 5y ago
  > we can and already do regulate energy production. True. If BTCUSD goes to $1m AND you have strict global regulation banning carbon energy, it will be a powerful incentive to harness green energy, which will be good for mankind in the long run.
  • criddell 5y ago
    Has there ever been strict global regulation of anything?
    • carlsborg 5y ago
      Sure, CFC emissions. And coal fired power plants are harder to hide.
      • criddell 5y ago
        CFCs & the ozone hole is a great example.
• adamisom 5y ago
  Well less energy does have downsides, see: all the things we use energy for. We probably don’t want to tax that except to prevent terrible harm. So I can imagine an argument being along the lines “alternative energy production isn’t ready to meet demand yet, oh and also burning carbon is useful for figuring out alternative energy (see: Tesla and the coal in China that’s burned to make their batteries) so how about instead we greatly fund alternative energy”.
• dmurray 5y ago
  > Seriously, what are the current best arguments against levying such a disincentive? The best argument against it is: it's very hard to enforce it on everybody internationally, and if one country adopts it unilaterally, then production just moves to another country (making everyone worse off - same amount of pollution, but the production is presumably less economically efficient). The second best argument against it is "the tax shouldn't be $x/ton, it should be $0.5x, which is a more accurate reflection of the external costs". A distant third, but very effective in practice, is "the carbon tax is good, but it shouldn't apply to Special Interest Area X, because of these social/political/historical reasons..." These aren't completely unsolvable problems, and people do try. But if your question was genuine, I hope you now see that there are some reasonable arguments not to just do this tomorrow.
  • bransonf 5y ago
    Absolutely agree, thanks for this reply. I was cognizant of the foreign policy implications (how would this possibly get implemented globally) but I hadn’t heard or considered your points 2 and 3. Given how much lobbying I suspect there is, 3 probably isn’t all that distant of a concern. Especially in older industries, say railroads or trucking, I understand there could be a lot of contention. And as others mention, I think there needs to be a separation of taxation by segments of polluting activities. Would burning fuel in a combustion engine count as taxable energy production? Only power plants? What about agriculture, construction, material production?
  • iso1631 5y ago
    > The best argument against it is: it's very hard to enforce it on everybody internationally, and if one country adopts it unilaterally, then production just moves to another country So tax imports (including the carbon cost of shipping) It would likely require agreement between the US and EU to shift enough of the global consumer market to actually care, but with Poland and Texas that doesn't seem likely.
• mbar84 5y ago
  Wrt. your second question: Supply of Bitcoin is pretty much constant, regardless of energy expended, regardless of mining technology. The causation runs like this: demand -> price -> mining. Less demand, lower price, less mining. More demand, higher price, more mining. This is different than any other resource we are used to, because the supply of nothing else is as constant as with bitcoin. If the cost to mine Gold increases, the supply goes down and the price will rise. Wrt your first question: The best argument against making energy more expensive is the same argument as it was 100 years ago: If you use energy now, you build a more prosperous civilization for the future. Your grandchildren may have to deal with a warmer climate, but they will be much better able to do so than if they were more poor. This argument stands and falls with your evaluation of the benefits of using more energy, the costs of a warmer climate and how you weigh these against each other.
• jnxx 5y ago
  Are not renewables (that is, wind and solar) the cheapest energy sources today? If I understand correctly, that would mean that bitcoin mining has to use them (in order to stay competitive), and bitcoin is effectively subsidizing renewables (because it pays money for renewable power generation, especially at times with low other demand - which makes expensive storage of electricity less of an issue). The only thing necessary would be to cancel ASAP any public subsidies for fossil-powered generation of electricity (which is a measure that is overdue anyways).
• machiaweliczny 5y ago
  AFAIK No, BTC algorithm ensures fixed mining difficulty (so amount of mining&minners doesn't matter (only for overtaking network)). Actually if too much BTC will be mined by limited amount of miners whole coin my lose value, e.g. if we require that barier to entry is having own power plant BTC might get destroyed by too greedy miners. IMO BTC existence is possibly good as it raises demand for cheap energy (and currently green energy is cheapest it seems), it's also good as forcing function for fiat.
  • triceratops 5y ago
    > BTC existence is possibly good as it raises demand for cheap energy As opposed to the rest of the economy, which only demands expensive energy? It would be pretty funny though, if the world's various governments decide BTC is an existential threat to their legitimacy and institute a carbon tax to destroy it.
  • anoncake 5y ago
    > IMO BTC existence is possibly good as it raises demand for cheap energy (and currently green energy is cheapest it seems), it's also good as forcing function for fiat. No. It increases demand for energy period. Increasing demand makes energy more expensive, not less.
• joshspankit 5y ago
  I think you’ve stumbled on The Solution. Like, in reality miners will use whatever power is cheapest, and solar is currently the cheapest. They are also extremely* agile and can shift location/power source in a handful of days which leads me to believe that they are currently driving adoption of solar, BUT: with miners being framed as The Big Threat, we might be able to finally use that perception as a crowbar to remove incentives for energy sources that pollute and even impose heavy taxes on those sources and end up completely digging out the oil/coal industries. Win Win Win as far as I’m concerned. *Apparently unless you can buy an entire power plant
• wdn 5y ago
  We don't need a carbon tax. What we need a get rid of all the print and spend politicians. The reason for the raise of bitcoin is a direct response to the trillions and trillions of dollars just printed out of thin air. It is insane how much grocery cost nowadays. I was at the supermarket last week and was looking at lobster, I thought it was listed for $6.99/lb for those 1 to 1.25 lb size, but when I got closed, it was $16.99/lb. It is crazy. Blue Crab at $5/each.
• hedora 5y ago
  The carbon tax should be earmarked to be spent capturing carbon, and cover about 2x the emissions of the power generated. A handy rule of thumb, for gasoline: A gallon of gas produces 20lbs of CO2. A ton is 2000lbs. If a carbon capture technology costs X dollars per ton, it costs X cents per gallon. Most carbon capture technologies will be in the $15 to $85 per ton range when they scale. Therefore, a $1/gallon gasoline tax (and equivalent for coal, etc), would be enough to solve climate change.