It will not happen. The Bitcoin lobby is already to strong in the US.
Crypto firms are among the top Democrat donors. Crypto CEO SBF plans on donating $100mil - $1bil in the 2024 election, and calls political donation the highest form of return of investment that exists:
> He was also one of just a handful of donors who spent $10 million-plus backing President Joe Biden in 2020, and in the last year, he’s hired a network of political operatives and spent tens of millions more shaping Democratic House primaries. It was a shocking wave of spending that looked like it could remake the Democratic Party bench in Washington, candidate by candidate. Looking ahead to the 2024 election, he has said he could spend anywhere from $100 million to $1 billion.
What makes you so sure the existing lobby are not the ones pushing for this? Also what makes you so sure that the banking/Wall Street lobby is not larger than the crypto lobby in terms of $$$? I suspect it is much larger. I also suspect they are the ones more ideologically aligned with DC here.
Proof of stake and other “environmentally friendly” consensus algorithms allow a select few to control the network and benefit the most from it which I suspect is the real goal here. The “environmental impact” is just an excuse.
It’s true that a large percentage of Bitcoin is owned by a few people, but at least now the benefit to them is only financial gain. Once you start to allow rich people to validate the blockchain itself, then they can begin to censor and block transactions or wallets from any individuals they deem unworthy or a threat to the powers at be.
We’ve already seen this happen with pretty much every traditional payment provider over the last few years to some extent so it was only a matter of time before they decided to come for Bitcoin.
Their real goal is to cripple and control the Bitcoin network. If they really cared about the environment they would go after energy companies or defense contractors or the banking industry who all use orders of magnitude more energy than Bitcoin miners.
As a sidenote, the executive branch has become much too powerful. They were never supposed to legislate like this. Every president since George W Bush has used extreme executive power, and no one seems to care. We are supposed to have elected representatives to legislate, not a king.
> The Bitcoin lobby is already to strong in the US.
Banning PoW would benefit Bitcoin; it's the main thing preventing it from becoming more popular right now. Having the government force the Bitcoin community to do what they've been unable to do themselves would be the best of all worlds for them.
> calls political donation the highest form of return of investment that exists
Well, he seems to be shitposting or knowingly lying, then. It says he has a $30 billion fortune currently, yet still drives a Corolla and uses his parent's Netflix account, so he apparently wasn't super rich to begin with. So unless he thinks he's going to become the world's first multi-trillionaire, there is no $100 mil to $1 bil investment that can return what he got out of starting his current business, which wasn't a political donation.
Or he means something non-financial by "highest form," as in he might actually care about the Democratic agenda apart from whether it can make him even richer or not.
You are way too sure about your stuff. "it will not happen", I'm laughing. See at what happened in China. You have a few crypto billionaires, and yet mining has been banned.
Interesting that I hear a lot about crypto money going to the far right. That may be a thing too but I guess the crypto world is not politically monolithic. That and if you really want influence you spread it around.
If their tax collection/law enforcement interest outweighed the part of the financial sector invested in Bitcoin they would have banned it during the Russian sanctions which provided perfect cover.
Instead, after a lot of noise about banning it, they “commissioned a study” which is well known in politics as “we have to save face/pretend to do something for optics”.
Wall St wins, this train has left the station. This is coming from someone who tracked bitcoin since $0.25 and was, to my poverty, convinced that it would be legislatively squashed the second it got on the radar of DC or the Fed.
I argue that, since mining is done in the US, mining is clearly providing more value than the electricity used, since it continues.
The power use is just an excuse.
Of course, the price of electricity should reflect its externalities (i.e. greenhouse gas emissions). That way, the market could find a better solution. But the fossil lobby has got deep pockets.
Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,”
so how would they enforce this? by running escrow on every single server to ensure this particular algorithm is not executed..? or would they simply measure energy consumption by the server and demand proof that the load is legitimate?
First, try to imagine the form this ban would take. Think about the specific language required to abolish proof-of-work computations without kneecapping the foundations of modern cryptography. I have yet to see anything remotely specific and plausible.
Second, let's say said language can be constructed and that it threads the proverbial needle. Who cares? Its effect on Bitcoin would be to drive mining to other political jurisdictions. But electricity costs and political actions have been doing that for years now.
If anything, a successful ban would merely further distribute proof-of-work mining around the globe and among clandestine operations within countries that have "banned" it. By making proof-of-work untenable at scale, governments will have only succeeded in setting Bitcoin back on its original path - greater distribution of hash power across a greater chunk of the world's geography and political boundaries.
If even authoritarian China can't effectively ban bitcoin mining, https://www.cnbc.com/2022/05/18/china-is-second-biggest-bitc..., I don't have a ton of hope for the US to succeed where they are actively failing. Though perhaps the hammer simply has not yet been forcefully swung.
Like what we saw with drug prohibition, bans that can't be enforced and defy the will of a sufficient number of people tend to backfire in the form of nurturing organized crime and a general decrease of trust in the government in the population.
Good governance needs to be careful to not declare bans it can't enforce.
The free market is waiting until there's only a few puddles of freshwater left and charging a million dollars a sip, as the Colorado River is proving[1] (or overfished waters, or all sorts of things). It's terrible at being proactive, it only benefits a company for exploiting a resource until it's gone, and ratcheting up the price until it is[2].
It would, but no one pays the real cost of electricity. Some people used to be able to in Texas but they banned that shit really fast once it became obvious that the average asshole can’t cope with real-time wholesale pricing volatility. $9/KWh adds up fast. If everyone had to suffer that same system, it’s possible we wouldn’t have had a winter crisis in 2021.
The problem, with limited electricity supplies, is the amount people will pay to mine bitcoins may be more than the amount available pay to heat people's homes, or power hospitals.
Yes, regulating Bitcoin directly would be bad. The much better solution is to make it more expensive for everyone else who has no interest in it to cook their food. That's obviously the correct way to deal with this.
The interaction between the real money cost to mine, the BTC-denominated reward from mining, the market price of a bitcoin in real money, and the effect on the bitcoin network hash rate from all of those things changing, and the speculation about what they may do in the future, and the irrationality of the markets, makes it kinda hard to predict.
I read the WH report and my impression, despite the one line
everyone is citing, is that Washington is slowly working its way to justifying acceptance of proof of work, despite whatever reservations they have, because its would be almost impossible, practically or politically, to ban it.
It would be absolutely impossible to 100% ban mining.
They could seize assets of miners big enough to need specialised energy deals, which would get rid of 90% of mining in the USA.
They could crack down on exchanges banking in USD, which would get rid of 90% of mining worldwide.
Stopping a single person running an algorithm on a single ASIC in a home environment is the impossible tail-end. I don't know if they even care about those, I'm not too worried about them.
Is anyone proposing perfect, absolute enforcement?
Once PoW is illegal wheels will start turning and it'll become impossible for larger miners. If that tamps down the energy usage enough the gov probably won't bother chasing down smaller players.
Or KYC controls could make it impractical to use PoW coins outside black markets.
Given the impending energy crisis in Europe this winter, expect the EU to follow suit.
As much as advocates tout crypto as being extra-governmental, it would honestly take very little to effectively cripple crypto. For example, a ban on financial institutions that want access to the US financial system from dealing in crypto.
When energy becomes a sufficiently important political concern it’s going to be a huge problem for PoW crypto.
Putting aside the technical impossibility of banning mining, I'd ask a moral question.
If it's widely believed that monopolies are bad, why is this proposal to support the government money monopoly good? Governments that are inflating their own currencies to hell and impoverishing their own citizens are trying to FUD and diminish a potential competitor that cannot possibly be hyperinflated.
The suffering and human misery that is going to come from government destroying the currency with no alternatives available is far worse than even the worst climate change doomsday predictions.
I'm curious what states like Wyoming, who run advertorials on Bloomberg TV placing themselves as a crypto haven, will think of this. And Florida too, where all the VCs moved. More divisiveness!
Prediction: One day western countries (or maybe some other faction) will prohibit transactions with certain entities. Many (most?) large stakeholders will need to abide and not approve those transactions (because they're large public entities).
People will attempt to run slashers against the regulated stakeholders because they're not doing their job right and just kind of hope that in a system that only works because wealthy people would refuse to lose money otherwise; that the wealthy people would be willing to lose money.
So the rich regulated forks will say fuck you and a fork will be the only solution that schisms the chain into a regulated fork where the rich people maintain a truth hat they've never done wrong and a non regulated fork where they have. People like off ramps to actual dollars so the regulated one will retain value while the other one drops rapidly. Stakeholders that think its cool to help people dodge sanctions will just lose their stakes by means of PoS because they're not maintaining "The Truth" in the regulated fork that they don't approve of and by declining market value in the fork that they do.
And in one glorious moment the PoS ecosystem will kick out all the decentralized dreamers
PoS is an adequate (although very complicated) consensus algorithm. But it's not a (fair) coin distribution method. It just lets everyone keep their share of the pie.
Coins that start without PoW have one entity holding 100% of supply that other people need to buy from them, leading to terrible wealth concentration.
People will just get around it? Not so fast. Let's compare this to large-scale pot growing inside your house. You think you're safe from helicopters and drones?
All those grow lights use a lot of power. That is detectable, and I'm certain that a surveillance society like China would have a much easier time detecting it than we will.
All those plants use water. Also easily detectable.
There will be more heat created by all those plants. Easy to see with a drone.
Merely buying all the supplies exposes you to police suspicion.
Do people still do it? Yes, but they're now the mouse in a cat-and-mouse game.
I feel like this is guaranteed to happen because everyone involved in the decision making can make a lot of money from it very easily. Easy to get caught insider-trading when it's shares and there's a broker, but buying up proof-of-stake currencies? This is a zero-risk windfall for politicians and you should invest accordingly.
Instead of picking and choosing what types of energy use should be allowed, the government should determine what the environmental cost of all energy use is and apply that as a tax. A so-called "carbon tax." One would think that this is Economics 101, but the idea evades many intelligent people.
Doing so would certainly assuage climate change concerns without any huge damage to bitcoin itself, which has enough coins and coon subdivisions to operate successfully. Hopefully bitcoin will see the light and terminate further coin generation.
[+] [-] neonate|3 years ago|reply
[+] [-] 323|3 years ago|reply
Crypto firms are among the top Democrat donors. Crypto CEO SBF plans on donating $100mil - $1bil in the 2024 election, and calls political donation the highest form of return of investment that exists:
> He was also one of just a handful of donors who spent $10 million-plus backing President Joe Biden in 2020, and in the last year, he’s hired a network of political operatives and spent tens of millions more shaping Democratic House primaries. It was a shocking wave of spending that looked like it could remake the Democratic Party bench in Washington, candidate by candidate. Looking ahead to the 2024 election, he has said he could spend anywhere from $100 million to $1 billion.
https://www.politico.com/news/2022/08/04/democratic-megadono...
[+] [-] fsociety999|3 years ago|reply
Proof of stake and other “environmentally friendly” consensus algorithms allow a select few to control the network and benefit the most from it which I suspect is the real goal here. The “environmental impact” is just an excuse.
It’s true that a large percentage of Bitcoin is owned by a few people, but at least now the benefit to them is only financial gain. Once you start to allow rich people to validate the blockchain itself, then they can begin to censor and block transactions or wallets from any individuals they deem unworthy or a threat to the powers at be.
We’ve already seen this happen with pretty much every traditional payment provider over the last few years to some extent so it was only a matter of time before they decided to come for Bitcoin.
Their real goal is to cripple and control the Bitcoin network. If they really cared about the environment they would go after energy companies or defense contractors or the banking industry who all use orders of magnitude more energy than Bitcoin miners.
As a sidenote, the executive branch has become much too powerful. They were never supposed to legislate like this. Every president since George W Bush has used extreme executive power, and no one seems to care. We are supposed to have elected representatives to legislate, not a king.
[+] [-] PontifexMinimus|3 years ago|reply
Which is why it should be banned.
[+] [-] Alex3917|3 years ago|reply
Banning PoW would benefit Bitcoin; it's the main thing preventing it from becoming more popular right now. Having the government force the Bitcoin community to do what they've been unable to do themselves would be the best of all worlds for them.
[+] [-] nonameiguess|3 years ago|reply
Well, he seems to be shitposting or knowingly lying, then. It says he has a $30 billion fortune currently, yet still drives a Corolla and uses his parent's Netflix account, so he apparently wasn't super rich to begin with. So unless he thinks he's going to become the world's first multi-trillionaire, there is no $100 mil to $1 bil investment that can return what he got out of starting his current business, which wasn't a political donation.
Or he means something non-financial by "highest form," as in he might actually care about the Democratic agenda apart from whether it can make him even richer or not.
[+] [-] MeltingAaah|3 years ago|reply
After all we all are loosing the climate change game thanks to Bitcoin and co.
We all pay the price. High electric bills due to more AC usage, more demand on electricity through Bitcoin mining and higher GPU prices.
[+] [-] lamontcg|3 years ago|reply
[+] [-] gojomo|3 years ago|reply
He's donated to climate-change charities & declared FTX to be carbon-neutral.
He might even see an angle for profit in helping suppress proof-of-work!
[+] [-] simonebrunozzi|3 years ago|reply
I suggest you learn some humility from history.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] JumpCrisscross|3 years ago|reply
This is peanuts for a hated industry. Facebook squirrels away far more to no benefit.
[+] [-] api|3 years ago|reply
[+] [-] user3939382|3 years ago|reply
If their tax collection/law enforcement interest outweighed the part of the financial sector invested in Bitcoin they would have banned it during the Russian sanctions which provided perfect cover.
Instead, after a lot of noise about banning it, they “commissioned a study” which is well known in politics as “we have to save face/pretend to do something for optics”.
Wall St wins, this train has left the station. This is coming from someone who tracked bitcoin since $0.25 and was, to my poverty, convinced that it would be legislatively squashed the second it got on the radar of DC or the Fed.
[+] [-] danuker|3 years ago|reply
I argue that, since mining is done in the US, mining is clearly providing more value than the electricity used, since it continues.
The power use is just an excuse.
Of course, the price of electricity should reflect its externalities (i.e. greenhouse gas emissions). That way, the market could find a better solution. But the fossil lobby has got deep pockets.
[+] [-] danuker|3 years ago|reply
[+] [-] brobdingnagians|3 years ago|reply
If the President can ban a specific, commonly used algorithm for arbitrary reasons, then we are in for a wild ride.
[+] [-] gwnywg|3 years ago|reply
[+] [-] yuan43|3 years ago|reply
First, try to imagine the form this ban would take. Think about the specific language required to abolish proof-of-work computations without kneecapping the foundations of modern cryptography. I have yet to see anything remotely specific and plausible.
Second, let's say said language can be constructed and that it threads the proverbial needle. Who cares? Its effect on Bitcoin would be to drive mining to other political jurisdictions. But electricity costs and political actions have been doing that for years now.
If anything, a successful ban would merely further distribute proof-of-work mining around the globe and among clandestine operations within countries that have "banned" it. By making proof-of-work untenable at scale, governments will have only succeeded in setting Bitcoin back on its original path - greater distribution of hash power across a greater chunk of the world's geography and political boundaries.
[+] [-] JumpCrisscross|3 years ago|reply
Trivial. Name Bitcoin and give the Treasury authority to restrict anything similar.
[+] [-] anonporridge|3 years ago|reply
Like what we saw with drug prohibition, bans that can't be enforced and defy the will of a sufficient number of people tend to backfire in the form of nurturing organized crime and a general decrease of trust in the government in the population.
Good governance needs to be careful to not declare bans it can't enforce.
[+] [-] drexlspivey|3 years ago|reply
[+] [-] cableshaft|3 years ago|reply
[1]: https://utahrivers.org/blog-post/2021/12/13/new-report-upper...
[2]: https://www.forbes.com/sites/drewhansen/2016/02/09/unless-it...
[+] [-] bob1029|3 years ago|reply
[+] [-] CJefferson|3 years ago|reply
Increasing the cost wouldn't fix that problem.
[+] [-] jjulius|3 years ago|reply
[+] [-] rvense|3 years ago|reply
[+] [-] ben_w|3 years ago|reply
[+] [-] chrisan|3 years ago|reply
Let companies do whatever they want, people will decide winners and losers with their wallets.
Something tells me the general public will go for the cheapest/most profitable company and only a minority will try to do "the right thing".
[+] [-] MeltingAaah|3 years ago|reply
Watch a documentary on how they created false research on purpose and lied in public.
You don't want a free market.
[+] [-] rufusroflpunch|3 years ago|reply
[+] [-] andy81|3 years ago|reply
They could seize assets of miners big enough to need specialised energy deals, which would get rid of 90% of mining in the USA.
They could crack down on exchanges banking in USD, which would get rid of 90% of mining worldwide.
Stopping a single person running an algorithm on a single ASIC in a home environment is the impossible tail-end. I don't know if they even care about those, I'm not too worried about them.
[+] [-] paulryanrogers|3 years ago|reply
Once PoW is illegal wheels will start turning and it'll become impossible for larger miners. If that tamps down the energy usage enough the gov probably won't bother chasing down smaller players.
Or KYC controls could make it impractical to use PoW coins outside black markets.
[+] [-] MeltingAaah|3 years ago|reply
Why wouldn't it be?
This makes it much harder for companies to get proper electric contracts, you can snitch on companies, you can audit them etc.
It might not be able to ban small setups but for sure makes a big dent in crypto companies. Official ones.
[+] [-] blantonl|3 years ago|reply
You are kidding, right? The United States has a outstanding history of banning things. Alcohol. Drugs. /s
[+] [-] jmyeet|3 years ago|reply
As much as advocates tout crypto as being extra-governmental, it would honestly take very little to effectively cripple crypto. For example, a ban on financial institutions that want access to the US financial system from dealing in crypto.
When energy becomes a sufficiently important political concern it’s going to be a huge problem for PoW crypto.
[+] [-] logicalmonster|3 years ago|reply
If it's widely believed that monopolies are bad, why is this proposal to support the government money monopoly good? Governments that are inflating their own currencies to hell and impoverishing their own citizens are trying to FUD and diminish a potential competitor that cannot possibly be hyperinflated.
The suffering and human misery that is going to come from government destroying the currency with no alternatives available is far worse than even the worst climate change doomsday predictions.
[+] [-] itsoktocry|3 years ago|reply
[+] [-] nl|3 years ago|reply
I think this is good.
Whether or not blockchain is a good thing, it's very clear that proof-of-stake is an adequate and energy efficient alternative.
[+] [-] spywaregorilla|3 years ago|reply
People will attempt to run slashers against the regulated stakeholders because they're not doing their job right and just kind of hope that in a system that only works because wealthy people would refuse to lose money otherwise; that the wealthy people would be willing to lose money.
So the rich regulated forks will say fuck you and a fork will be the only solution that schisms the chain into a regulated fork where the rich people maintain a truth hat they've never done wrong and a non regulated fork where they have. People like off ramps to actual dollars so the regulated one will retain value while the other one drops rapidly. Stakeholders that think its cool to help people dodge sanctions will just lose their stakes by means of PoS because they're not maintaining "The Truth" in the regulated fork that they don't approve of and by declining market value in the fork that they do.
And in one glorious moment the PoS ecosystem will kick out all the decentralized dreamers
[+] [-] tromp|3 years ago|reply
Coins that start without PoW have one entity holding 100% of supply that other people need to buy from them, leading to terrible wealth concentration.
[+] [-] bsaul|3 years ago|reply
[+] [-] Cupertino95014|3 years ago|reply
All those grow lights use a lot of power. That is detectable, and I'm certain that a surveillance society like China would have a much easier time detecting it than we will.
All those plants use water. Also easily detectable.
There will be more heat created by all those plants. Easy to see with a drone.
Merely buying all the supplies exposes you to police suspicion.
Do people still do it? Yes, but they're now the mouse in a cat-and-mouse game.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] baazaa|3 years ago|reply
[+] [-] jinpa_zangpo|3 years ago|reply
[+] [-] flarg|3 years ago|reply
[+] [-] danuker|3 years ago|reply
[+] [-] spywaregorilla|3 years ago|reply
[+] [-] bilsbie|3 years ago|reply