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Finally found the text of the amendment: https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%20Toomey%20Crypto%20Amendment.pdf https://www.finance.sena

• Tepix 5y ago
  I guess we need a proper CO2 tax to encourage better technology than proof of work
  • sputknick 5y ago
    ETH PoS mainnet transition is underway and will be completed early 2022. With this holders of ETH will be able to earn fees from transactions, just by running an application on their standard normal computer. The only encouragement you need to move off of POW is profit motive.
    • whichquestion 5y ago
      Hasn’t PoS been something “in the works” for ETH for something like 6 years now[1]? I don’t think anything guarantees its delivery in early 2022, it all seems like hopeful speculation until they deliver something. [1] This stackexchange question dates back to 2016, the earliest evidence I could find of ETH proposing PoS. https://ethereum.stackexchange.com/questions/9/why-does-ethereum-plan-to-move-to-proof-of-stake/75 https://ethereum.stackexchange.com/questions/9/why-does-ethe...
      • tornato7 5y ago
        This time it's very different. There are billions of dollars of ETH locked up in the staking contract, and proof of stake has been live and operating on the beacon chain for many months.
      • casi18 5y ago
        it took a long time to work it out, but it is running on the beacon chain and the consensus upgrade spec has now been merged: https://github.com/ethereum/EIPs/pull/3675 https://github.com/ethereum/EIPs/pull/3675
    • overtonwhy 5y ago
      Haven't they been saying POS will be "ready soon" for years? Seems like maybe vaporware used for hype? "The Ethereum proof of stake date has been set for December 1, 2020. While the proof of stake Ethereum date was originally set for January 2020, this deadline was missed." https://www.exodus.com/blog/ethereum-proof-of-stake-date/ https://www.exodus.com/blog/ethereum-proof-of-stake-date/
      • robcohen 5y ago
        PoS is already working in Cardano, Tezos, and Algorand (among others).
      • tedunangst 5y ago
        There's a button you can click to stake ethereum on Coinbase, which seems a bit past the vapor stage.
      • vmception 5y ago
        Is that what a cursory Google search brings up? It actually did launch in December 2020, so that's awkward. Some HN users are staking Eth and earning on Eth 2.0 contract, which functions on the Beacon Chain. Both chains have not been merged yet, far from vaporware so I guess last decade called and wants its arguments back.
    • Yizahi 5y ago
      So do you think Eth miners will just write off their expensive GPUs and throw them into trash bin? It is rather obvious that they will switch to either fork (less probable) or to next best token (more probable).
  • ComodoHacker 5y ago
    This would just increase the cost of electricity and thus the cost of living for everybody, and won't affect crypto miners much.
    • api 5y ago
      The parent is simply pointing out that all consumption taxes are regressive. A CO2 tax by itself is a tax on the poor, especially the rural poor who have longer commutes and are more dependent on automobile travel. A CO2 tax is only fair if it's paired with progressive tax breaks in other areas and/or subsidies for transition to renewable energy. An example would be a progressive subsidy for electric vehicle purchases and for upgrades to CO2-heavy (coal) electricity generation infrastructure in poorer areas.
      • admax88q 5y ago
        A CO2 tax and rebate is progressive. The poorest people would receive more back in a rebate than they pay. But the biggest CO2 users would pay way more than they receive back.
        • adolph 5y ago
          > I guess we need a proper CO2 tax to encourage better technology than proof of work The statement replied to does not mention "rebate." > But the biggest CO2 users would pay way more than they receive back. This statement does not seem believable given the recent stories about tax avoidance strategies of the wealthy.
        • Groxx 5y ago
          While I generally like CO2 tax/rebate/cap-and-trade systems: given how inefficient and polluting many low-cost techs are... not sure I can agree with that, particularly on the small scale down to individual people. Individuals have the least agency on decisions like this, since they have next to no purchasing power. Though we are talking about bitcoin, which does raise the technical/money base-level a fair bit.
  • jb775 5y ago
    If you use your brain to think through the initial 3-4 domino effects of a carbon tax, you'll quickly realize that the end result is the little guy paying the actual tax via inflation while the big guy actually enjoys larger profit totals (maintaining profit margin % on newly inflated prices = more profit). The tricky part is actually using your brain to think it through.
    • purple_ferret 5y ago
      Carbon tax is about transitioning away from carbon. If you're afraid about the little guy, couple it with a tax cut on lower incomes.
      • arcticbull 5y ago
        I believe the Canadian carbon tax is revenue neutral, and the amount collected is returned via income tax credits.
    • gruez 5y ago
      >you'll quickly realize that the end result is the little guy paying the actual tax via inflation while the big guy actually enjoys larger profit totals What's the alternative then? Implement regulations, forcing companies to increase costs => "enjoys larger profit totals "? Tax companies only, forcing them to pass them onto consumers => "enjoys larger profit totals"? Do nothing?
      • jb775 5y ago
        > Do nothing? Yes. If the currently available options intended to fix a particular problem don't actually fix the problem while at the same time make the offending business more powerful while making the little guy less powerful...then yes, doing nothing is clearly a better option in the short term.
        • gruez 5y ago
          >If the currently available options intended to fix a particular problem don't actually fix the problem Sounds like your expectation is too high. Either something stops climate change in its tracks, or it's not worth doing. Small incremental improvements? Nah, it won't solve the problem so let's not bother. >doing nothing is clearly a better option in the short term. But what about the long term?
  • jonathanpeterwu 5y ago
    We should probably also find a way to tax US dollar usage with CO2 tax as the net energy usage here is quite high as well
  • sunshinerag 5y ago
    There is nothing in POW that requires CO2 emissions.
    • p_l 5y ago
      But the core principle of Proof of Work is wasting energy. If it takes from green sources, that just means those green sources won't be available to push out polluting ones. Combine this with buildup of polluting sources as backups for intermittent ones...
      • politician 5y ago
        The Sun is wasting energy. Did you know that only like 0.0001% of the energy radiated by the Sun makes it to the Earth? Proof of Work doesn't waste energy. It uses energy to secure a distributed ledger.
      • sunshinerag 5y ago
        No, there is no waste. It is a very efficient conversion of energy to security of the ledger. And with that ledger instead of all the wars and waste generated by manipulatable central bank ledgers it’s a win.
        • vkou 5y ago
          1. There is nothing efficient about wasting that much electricity on securing a ledger that can handle single-digit transactions per second. 2. The needs of central banks don't start wars, the needs of politicians, warhawk nationalists, and the needs of modern industrial economies do. [1] Unless BTC somehow magically gets rid of politicians, nationalism, or of our addiction to oil, that's not going to change. [1] The US didn't invade Grenada because of the Fed. The USSR didn't invade Afghanistan on behalf of Gosbank. China didn't invade Tibet to fix the balance sheet of the PBC. Vietnam didn't fight a war with its occupiers, and then a civil war, and then a war with Cambodia, and then a war with China, because it was unhappy with the Dong to USD exchange rate. The US participated in that civil war because of domino theory, not because of its departure from the gold standard. The list goes on and on. [2] [2] Wars aren't fought over currencies, wars are fought over territory, pan-ethnic nationalism, to increase the internal popularity of a warhawk, to maintain a hegemony, to impose one's religion on another, to expel unwanted people from a territory, etc, etc, etc. Bitcoin solves none of these problems.
  • godelski 5y ago
    There's plenty of PPOS systems that aren't as resource intensive. ETH2 doesn't require POW. Algorand is PPOS and built a contract into the leger to offset carbon emissions for the electric costs, making it carbon neutral or negative.
  • awrence 5y ago
    The math on the PoW energy FUD just doesn't check out. - At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error. This issue is currently a total red herring. Now let's project into the future. - bitcoin total addressable market cap if it took over the entire global monetary world (full global monetary premium): ~ 250tn or 300x from here implying a worst case outcome of 7.5% of global emissions, IF this happened TODAY and hashpower linearly tracked price. This is impossible off the bat because building out that infrastructure would take at least a decade. But more importantly it will take a decade or two for price to get there, by which time... - The block subsidy will have gotten cut by ~ 10 (three halving cycles). Transaction fees might grow of course so let's say 5x lower which gets us back to 1.5% of global emissions. - Add to that the following: - 30% of CURRENT electricity production is stranded / wasted. All terminal bitcoin energy usage needs to do is tap into 5% of that to be emissions neutral. And it's heavily skewed towards tapping into that exclusively as that's the cheapest source and PoW is location neutral. - the proof of work energy mix skews towards not only wasted / stranded but renewable which is trending towards being the cheapest form of energy. - green power production is on an exponential adoption curve and enough sunlight hits the earth to power humanity for a year. Clean energy is there in amounts dwarfing societal needs, it's just a matter of harnessing it. This doesn't even include geothermal or nuclear. - At an even higher level, if you got to this point, you would have replaced all the fiat systems in the world thereby: - eliminating the energy spent on maintaining the fiat system which is easily more than 1.5% of global emissions - flipping the world into a hard money world that is no longer incentivized to consume at all costs (read misallocate capital) ergo hugely reducing conspicuous consumption / GDP growth at all costs which is arguably the biggest driver of unnecessary emissions - This final line of thought would have you conclude flipping to PoW would be emissions negative in the long run, but you don't really need to go there though, the energy numbers alone make this at best a chronically misunderstood narrative.
    • zaphar 5y ago
      You make a lot of claims here but I don't see anything in your post to back up the numbers. I'm too lazy to go do this research myself so I'm left as a result with defaulting to disbelieving you.
  • Taek 5y ago
    A proper CO2 tax wouldn't be disruptive to bitcoin, bitcoin only cares that everyone pays the same price for electricity. If the absolute cost of electricity goes up, nothing changes.
    • arcticbull 5y ago
      Unless the tax applies globally then they’ll just flee to Kazakhstan. Oh wait; they won’t have to flee far.
    • akira2501 5y ago
      > If the absolute cost of electricity goes up, nothing changes. The cost of electricity does impact the cost per transaction on the network, does it not?
      • RamshackleJ 5y ago
        nope, transactions clear at a rate unrelated to mining(so long as at least 1 person is mining). The only thing that impacts transaction costs is how many other people are trying to clear their own transactions and bidding up the sat/vbyte rate.
        • IfOnlyYouKnew 5y ago
          Either transaction costs go up, or electricity usage per transaction goes down. Anything else just doesn’t add up.
          • arcticbull 5y ago
            Most coiners conveniently ignore block reward when calculating the cost of a transaction - that's your missing factor. Consider that the only reason you need to secure the blockchain is because it is mutable, if it were immutable it would be sufficient to simply publish it with a known hash. Ergo, 100% of the energy consumption of the Bitcoin network is attributable to transaction processing and therefore can be quantized into and proportionally assigned to transactions. TotalCost = DirectCost + ProportionalAllocationOfBlockReward The value of the block reward is proportional to the price of bitcoin, and this block reward determines the ceiling of the consumption of resources in mining. The floor is determined by prisoners dilemma and so likely approaches the ceiling at the limit. So yes, the transaction cost does scale with consumption of resources, albeit in a tail-wagging-the-dog kind of way, because the price of the block reward changes with price allowing more resources to be consumed. Currently the actual cost of a Bitcoin transaction is $2.44 in direct costs + (6.25 * 41000)/2750 = $93 in indirect costs, so right around $95.44 - and that's using I believe the maximum possible transactions per block, the reality is it's more expensive still. Move over Bank of America, there's a new king in town.
• cwkoss 5y ago
  Also note that this crypto tax-reporting provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place. Exempting actors in the crypto space who facillitate crypto usage without ever having custodial control of the funds makes a lot of sense. (Just like envelope manufacturers shouldn't have to register as money transmitters because people sometimes mail cash.) The provision that was slid in was nonsensically bad.
  • JumpCrisscross 5y ago
    > this crypto tax provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place. Why not? The infrastructure is being paid for in part by this tax. They're fundamentally linked.
    • 3np 5y ago
      The biggest issues were less with the tax part and more with requirements around KYC, data gathering, and reporting.
    • cwkoss 5y ago
      Updated my comment to clarify a bit: this wasn't a tax on crypto, it was about tax reporting requirements for certain actors in the crypto space. (Because Bitcoin is psuedonymous it would have effectively be impossible to comply - functionally it was a ban on crypto mining in the US) Even with the original language, this provision generates no revenue. It's only about data collection.
      • JumpCrisscross 5y ago
        > this provision generates no revenue. It's only about data collection. I would want to see an independent analysis of this claim. Increasing reporting requirements can generate revenue. There is a lot of unreported income. Given the culture around crypto, it isn't unreasonable to assume there is more of that going on there than baseline.
• 3np 5y ago
  > (C) developing digital assets or their corresponding protocols for use by other persons, provided that such other persons are not customers of the person developing such assets or protocols. The last qualifier seems poorly worded and becomes too broad. So (extreme example) a consulting agency developing a value-exchange platform to be run on a private chain in a customer corporate network would not be exempt. Bringing the act of building and selling software (or a SaaS, as long as the service itself doesn't custody user funds) is nonsensical. (B) is also a bit too narrow to address this.
• notJim 5y ago
  Does this include or exclude DEXes? It sounds like C) could mean that DEXes are not included (which would be good), but I'm not entirely clear on the legal definitions of some of these things.