Can't this be said about literally anything?
Bitcoin and cryptos in general are actually worth more than $0 because people are tired of seeing their cash devalued on the whim of politicians and bankers.
No. Carbon taxes would not make everything worthless.
I think you already knew what I meant but just wanted to nitpick.
https://en.wikipedia.org/wiki/Pigovian_tax
It's obvious that you can tax anything by some amount to eat up the value.
He means if you tax it according to the amount of unaccounted-by-the-market negative value, it comes out negative.
But the economist in OP is essentially ignoring where bitcoin actually get's it's value from and only focusing on it's electrical consumption.
Bitcoin means different things to different people. But many see it as the single best hedge against modern monetary policy.
How do you justify this, given that inflation is so low? (at least in the EU it's been oscillating between 0 and 2% for a very long time)
https://tradingeconomics.com/euro-area/inflation-cpi
Is this what people are so tired of? 1% inflation? I'm just trying to understand whether you're parroting "libertarian" talking points, or whether you know something I don't.
As another commenter notes, CPI leaves out many of the most major expenses, e.g. housing.
There are estimates as high as 8% annually when you account for everything.
Thanks in advance.
Second, this definitely cannot be said about anything. There are plenty of products and industries that produce positive economic value _even with_ the environmental impact added.
All this independence from states seems totally overrated to me. They can tax your crypto. They can participate in the crypto market.. many possibilities.
This feedback mechanism doesn't exist when money can be created out of thin air. Then, if you run out of money, you just print more.
There haven't yet been any successful attempts at destroying it, which I think is what you're implying. Not to say it can't happen, but then if we prepared for every single possible scenario we'd all be quite exhausted.
I bet they like it much more when the value of digital currency jumps up and down when a South African guy feels like tweeting.
Inflation serves a purpose. The cash is devalued not on a whim, but to prevent collapse. Bitcoin indeed prevents that. Fortunately it's just a fringe market. Lets hope it stays that way.
Tell that to Venezuela.
Not at all. Lots of businesses make money by turning materials and/or labor into products. Other businesses make money solving problems for people or other businesses. However, crypto (and most of the rest of the financial sector) burn shit tons of energy, materials, time, and human effort generating wealth; wealth expressed in either bitcoin that doesn't really exist, or money that also doesn't really exist. The only real product they consistently produce is said wealth, yes, and also huge amounts of human suffering when their given business goes sideways and tanks the economy. With that in mind, maybe we ought to add said carbon taxes. I'm extremely pro killing off businesses that do nothing but generate profit on a spreadsheet for some overpaid stuffed suit and contribute nothing to humanity, nothing to the economy, solve no problems, and in general just cause the economic equivalent of "wind drag."
Mind you, my definition of "contributing" here is purposely overbroad. Coca-cola, despite producing literal sugar water, is contributing, even if that contribution is literally just sugar water that slowly kills you. It made something you can hold in your hands that people want, even if it's horrible. Hell even tobacco companies fit this definition. In my mind, financial corps and bitcoin companies are below those: using the finite entropy of the universe and the limited resources of our world to do exactly nothing.
This specific problem — settling transactions — is an industry amounting to billions. Think of BTC like a MasterCard or Visa competitor, albeit a unique one.
I'm optimistic that there is a better way to store a ledger as you describe. Perhaps a database?
We've done this with a network that can process 400k transactions per day (at $20/transaction in fees), as compared to visa, which does 150 million per day.
Surely, we can do better?
It's clearly an industry with huge potential if it is economically viable to spend money buying an Argentina's worth of power on it.
As a whole people we should include these externalities in the value prop of services despite the fact that businesses and individuals don't because it's a cost we collectively pay.
Trash is my biggest pet-peeve example of this. As an individual I have very little power to control the amount of trash I produce because goods I buy come with so much stupid packaging that I can't give back or recycle and there is no incentive for the people in the position to affect change to do anything about it because they don't bear the cost.
In a similar fashion carbon taxes help to capture the negative externalities of energy use. And if the article is true then collecting that tax would make it so that bitcoin mining is (right now) unprofitable. This is to be expected since such a collection would be sudden increase in the cost of mining when the market has pushed margins thin. The market would adjust, transaction fees would go up, and miners would find non-carbon producing energy sources and we'd probably reach a new equilibrium that is profitable for everyone involved again.
If bitcoin went away tomorrow, a bunch of financial companies would have a lot of problems, a few big holders would be out money, and that's it. For every other human, it's Thursday.
Conversely, if gasoline didn't exist tomorrow, society would collapse.
But you posit that people choosing cigarettes provides some value, despite the negative effects. Why is there no value than in people being able to chose a money/investment vehicle they believe to be to their benefit?
Because the only thing generated is fake money on a spreadsheet. There is no product, there is only consumption of resources to generate nothing.
For all of what's involved here, you could just pull the same amount of money out of thin air, deposit it in their IRA, and nothing changes, apart from way, WAY less energy consumption.
Gold is one object that's served the money function in the past. It has properties (fungibility, durability, scarcity, etc.) that money needs. But it's "dumb" and cumbersome, as physical objects are.
Building digital objects that serve the money function is important. One solution is the centralized ACH/banking system. But this has drawbacks --- poor scarcity, high political exposure, etc. I view BTC as simply building a competitor. You get better money properties, at the cost of more energy, etc.
Is it worth it? I don't know. But that partly depends on how the future produces energy.