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I agree crypto mining is wasteful, but I don't think this kind of narrowly targeted tax is the right solution. ideally the federal government would not have an

I agree crypto mining is wasteful, but I don't think this kind of narrowly targeted tax is the right solution. ideally the federal government would not have an opinion on what citizens use electricity for, only that the externalities of power generation are priced in. at a high level, crypto mining is just arbitraging the price of electricity. if the externalities are priced into generation, this is a non issue. if they're not, a tax should be applied that doesn't discriminate by use case.

paxys 3y ago
> ideally the federal government would not have an opinion on what citizens use electricity for, only that the externalities of power generation are priced in. Only if you take the stance that energy generation and use sure be governed by pure free market economics, which never works out in the real world. Natural resources are limited. Mining/drilling has environmental impacts. People need energy to survive. It makes a lot more sense to go the opposite direction – treat it as a public good (which it is) and regulate usage. Otherwise you will end up in the inevitable reality where there is a large bitcoin mine in town printing cash for its owners and no one living around it can afford to heat their houses.
Verdex 3y ago
On an individual level, I agree with this sentiment. However, as power and influence increases, I feel, so too does accountability to the community. For example, if an individual wants to have christmas lights on their house year round, I think they should be allowed to as long as they can pay their electric bill. However, if a crazy billionaire wants to blast a giant laser into the sky and this causes brown outs due to the power draw to the surrounding community, then I think the community should be able to get the laser shut off. And on the other hand, if the billionaire runs a free entry water park and that causes brownouts, I think the community should be able to decide whether or not to flip the switch.
- personjerry 3y ago
  So really it's taxing excessive electricity usage rather than targeting the motivation behind the usage?
- leetcrew 3y ago
  I'd rather see this mitigated with tiered kWh rates that are still use case agnostic. so the amount of energy needed to heat/cool a reasonable family home could be purchased roughly at production cost, but the rate could step up steeply past that amount. this would either discourage silly laser shows, or at least make sure the community gets funds to build out solar/wind/whatever from the show. if this approach also discourages free water parks, I'm okay with that. if the community really wants that, they can weigh it against other public interests and consider funding it out of public coffers.
  - jrm4 3y ago
    Again, I think that "generally, the government we have now" does as good or a better job of "what the community wants" than whatever it is you're proposing? Especially here? It's absolutely reasonable -- if not likely -- to think that "the community" thinks of bitcoin mining as a wasteful and stupid idea and is expressing that preference through its politicians. I don't think you're going to see a lot of arguments in terms of "this is political overreach."
    - leetcrew 3y ago
      I honestly could not care less whether crypto mining is or is not a viable business. I don't do it myself, and I don't hold any crypto. I just hate to see yet random tax meant to appease people who are upset over this week's headline and will move on to being upset about something else next week. it's not an effective recipe for addressing actual root causes of problems. but yeah, I don't really expect anyone to care much about crypto bros getting a targeted shafting. dueling windmills would probably be a better use of my time.
      - jrm4 3y ago
        Yeah, I mean I think "proof of work" crypto is an easy target for an entirely appropriate reason; it's perfectly wasteful, even beyond eg ridiculous Christmas lights. And now that crypto has better "work functions" e.g. "proof-of-stake," there's just no reason to not tax this.
apendleton 3y ago
It seems like in the immediate term, and possibly forever, part of the process of decarbonizing the electricity sector is going to be demand management -- we have a finite amount of clean power available, and bottlenecks (interconnection, permitting, etc.) on the speed with which more can be built, so some of the work will just be discouraging use. It doesn't strike me as unreasonable that, if _some_ use needs to be discouraged, the state should have some opinion as to which use it is that gets the short straw, especially since a flat tax on all use would be super regressive: if higher electricity prices mean some retiree in the sun belt can't afford their AC in the summer and dies of heat stroke, avoiding that by shifting the costs onto crypto bros seems like a no-brainer. All of this probably becomes even more true as load-shifting becomes a bigger deal. Like: currently, replacing gas-powered boilers for 24/7 industrial processes with electrified heating isn't anywhere near cost-effective if you have to pay peak electricity rates for heating, but there are a bunch of new heat-battery companies spinning up that will take advantage of wholesale fluctuations to generate a ton of heat in the middle of the day when the sun's out, heat up a big box of rocks or whatever, and they siphon off the heat over the course of the day as electricity prices spike in the evening. This could dramatically accelerate industrial-heat decarbonization (which is something like 30% of US GHG emissions), but it only works if there's a price trough to take advantage of; if there are crypto-miners there to gobble up all the curtailed power and stabilize the price, the economics don't pencil out, and we're stuck with gas heat for factories. Again, doesn't seem unreasonable as a thing the state would have an opinion about.
jrm4 3y ago
Nothing personal, but the real world has already tried that flavor of "idealism" and it has failed all over the place, which is why governments occasionally, if not often, do get into the business of regulating down to the purpose. This is the entire point of government.

paxys 3y ago

> ideally the federal government would not have an opinion on what citizens use electricity for, only that the externalities of power generation are priced in. Only if you take the stance that energy generation and use sure be governed by pure free market economics, which never works out in the real world. Natural resources are limited. Mining/drilling has environmental impacts. People need energy to survive. It makes a lot more sense to go the opposite direction – treat it as a public good (which it is) and regulate usage. Otherwise you will end up in the inevitable reality where there is a large bitcoin mine in town printing cash for its owners and no one living around it can afford to heat their houses.

Verdex 3y ago

On an individual level, I agree with this sentiment. However, as power and influence increases, I feel, so too does accountability to the community. For example, if an individual wants to have christmas lights on their house year round, I think they should be allowed to as long as they can pay their electric bill. However, if a crazy billionaire wants to blast a giant laser into the sky and this causes brown outs due to the power draw to the surrounding community, then I think the community should be able to get the laser shut off. And on the other hand, if the billionaire runs a free entry water park and that causes brownouts, I think the community should be able to decide whether or not to flip the switch.

personjerry 3y ago
So really it's taxing excessive electricity usage rather than targeting the motivation behind the usage?
leetcrew 3y ago
I'd rather see this mitigated with tiered kWh rates that are still use case agnostic. so the amount of energy needed to heat/cool a reasonable family home could be purchased roughly at production cost, but the rate could step up steeply past that amount. this would either discourage silly laser shows, or at least make sure the community gets funds to build out solar/wind/whatever from the show. if this approach also discourages free water parks, I'm okay with that. if the community really wants that, they can weigh it against other public interests and consider funding it out of public coffers.
- jrm4 3y ago
  Again, I think that "generally, the government we have now" does as good or a better job of "what the community wants" than whatever it is you're proposing? Especially here? It's absolutely reasonable -- if not likely -- to think that "the community" thinks of bitcoin mining as a wasteful and stupid idea and is expressing that preference through its politicians. I don't think you're going to see a lot of arguments in terms of "this is political overreach."
  - leetcrew 3y ago
    I honestly could not care less whether crypto mining is or is not a viable business. I don't do it myself, and I don't hold any crypto. I just hate to see yet random tax meant to appease people who are upset over this week's headline and will move on to being upset about something else next week. it's not an effective recipe for addressing actual root causes of problems. but yeah, I don't really expect anyone to care much about crypto bros getting a targeted shafting. dueling windmills would probably be a better use of my time.
    - jrm4 3y ago
      Yeah, I mean I think "proof of work" crypto is an easy target for an entirely appropriate reason; it's perfectly wasteful, even beyond eg ridiculous Christmas lights. And now that crypto has better "work functions" e.g. "proof-of-stake," there's just no reason to not tax this.

apendleton 3y ago

It seems like in the immediate term, and possibly forever, part of the process of decarbonizing the electricity sector is going to be demand management -- we have a finite amount of clean power available, and bottlenecks (interconnection, permitting, etc.) on the speed with which more can be built, so some of the work will just be discouraging use. It doesn't strike me as unreasonable that, if _some_ use needs to be discouraged, the state should have some opinion as to which use it is that gets the short straw, especially since a flat tax on all use would be super regressive: if higher electricity prices mean some retiree in the sun belt can't afford their AC in the summer and dies of heat stroke, avoiding that by shifting the costs onto crypto bros seems like a no-brainer. All of this probably becomes even more true as load-shifting becomes a bigger deal. Like: currently, replacing gas-powered boilers for 24/7 industrial processes with electrified heating isn't anywhere near cost-effective if you have to pay peak electricity rates for heating, but there are a bunch of new heat-battery companies spinning up that will take advantage of wholesale fluctuations to generate a ton of heat in the middle of the day when the sun's out, heat up a big box of rocks or whatever, and they siphon off the heat over the course of the day as electricity prices spike in the evening. This could dramatically accelerate industrial-heat decarbonization (which is something like 30% of US GHG emissions), but it only works if there's a price trough to take advantage of; if there are crypto-miners there to gobble up all the curtailed power and stabilize the price, the economics don't pencil out, and we're stuck with gas heat for factories. Again, doesn't seem unreasonable as a thing the state would have an opinion about.

jrm4 3y ago

Nothing personal, but the real world has already tried that flavor of "idealism" and it has failed all over the place, which is why governments occasionally, if not often, do get into the business of regulating down to the purpose. This is the entire point of government.