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This is one of those "Freakonomics" type ideas. On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite. When go
by disruptalot 5y ago
This is one of those "Freakonomics" type ideas.
On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite.
When governments ban it, they go after sizeable, identifiable organizations running these operations, that is their only choice. These operations are optimized in their energy usage, because it's only in their interest to reduce their consumption relative to the value of the coin they mine.
The moment these operations are shutdown, there is a massive sink in the hash rate, smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way.
- socialist_coder 5y agoI think you're probably right. Money always finds a way.
- zepto 5y agoThe proposal is to stop Bitcoin/PoW being money. Other forms of money will find a way.
- Nursie 5y agoBut in the mean time the value is likely to have tanked, because if they can't trivially be traded for national currency, the interest in them will wither.
- dimmke 5y agoThis is the thing that has always bugged me about cryptocurrency - people are only passionate about it because they want to make more traditional currency with it. Then they adopt this "decentralized" rhetoric. It's always felt hollow. If owning/trading bitcoin became a crime, it'd be done. Ever since Dogecoin had a moment, there's now a million coins trying to engineer their own "moonshot". This is on top of the security issues and of course the energy issues. Cryptocurrency is garbage.
- sdenton4 5y agoThe other choke point is conversion to and from USD. With a law, BTC loses any corporate 'investment' (eg, Tesla), and coinbase stops converting to/from USD, making it much more of a pain to work with.
- hocuspocus 5y agoI deleted my comment that was essentially saying the same. For once, USD's extra-territorial jurisdiction could definitely be put to good use. I don't understand why big political parties haven't thought of that. It's an easy win, and it would bother an insignificant portion of their voter base.
- aeternum 5y agoThis would be like playing whack-a-mole. Other PoW cryptocurrencies are out there and it does not make sense to just shut down the mining hardware. Miners will just mine something else. The only answer that works is a carbon tax.
- zepto 5y ago> On the surface this sounds like bitcoin's PoW use will simply stop. It's actually the entire opposite. Not really. It wouldn’t stop, but it would decline substantially. Smaller operations and hobbyists only participate because it’s worth money to do so. Making Bitcoin illegal would kill the argument that it will eventually displace fiat, and relegate it to being used only for illegal purposes. The incentive to mine a currency that can only be used for crime as a hobbyist would end up being low.
- foerbert 5y agoThat's assuming PoW cryptos would remain attractive to smaller operations and hobbyists. I'm not sure that's a given. If no business can change your coins to fiat, and no business could accept your coins in the first place (not that they really do now, but whatever), your options for getting anything out of your coins is... what? Posting on craigslist to find people to meet up for illicit localcoin transactions? And if you can't really do anything with your coins but have your coins, why would people rush out to break the law to mine them?
- mckeed 5y agoThe idea was to ban trading, not mining. If Coinbase and all the other legitimate companies that facilitate crypto markets for U.S. citizens had to drop PoW coins it could tank the price significantly and set the coin mining industry back to when it wasn't such a huge problem for energy use and GPU supply. Speculation would move to PoS currencies and BTC would stay valuable, but would act more like an altcoin.
- varispeed 5y agoCurrently the trade of illegal drugs is banned. Have a look how that goes.
- Misdicorl 5y agoThis is a terrible analogy. Drugs are inherently desirable. There is nothing inherently desirable about crypto coins
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- hocuspocus 5y agoIf you can't speculate online and in a convenient, legal way, the value of BTC and friends will certainly tank. Let people trade cryptocurrency to fiat in person all they want, it's completely insignificant.
- hahahanonono 5y agotrading is only a small portion of bitcoin's market cap. most coins are outside of exchanges, in noncustodial cold storage. even without smooth trading platforms people will trade bitcoin peer-to-peer because bitcoin solves real world problems
- rfrey 5y agoUnlike drugs which have limited substitutes (alcohol and caffeine I guess), PoW currencies would have several functionally equivalent replacements. I doubt we'd end up ravaging underprivileged communities as they turned to black market Bitcoin.
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- stuaxo 5y agohttps://www.americanscientist.org/article/freakonomics-what-went-wrong https://www.americanscientist.org/article/freakonomics-what-... We will see, the trouble with Freakanomics, is that it had quite a few avoidable errors in it, so maybe it's not the best example.
- swensel 5y agoDoesn't the mining difficulty decrease then though without the massive mining farms, and thus the electricity required decreases? I'm not an expert in crypto mining.
- exo762 5y ago> smaller operations and hobbyists will rush in to fill it. Hash rate gradually climbs back up and instead you have 10x the energy usage because you can no longer run the PoW in a scalable way. This is false. Miners will spend about the same amount of money they get from block reward to run their operation. Asymptotically, this money is spent to buy electricity. This is the result of competitive pressure from other miners. What you will observe instead is the same amount of electricity burned but with 10x less hash rate.