China’s Bitcoin miners flee Inner Mongolia ahead of crypto mining ban
forkast.news
forkast.news
Obviously the network and operate fine with less power, but if that reduction in hash rate occurs because most of the world has banned mining, you can imagine a situation where the remaining miners can much more easily centralize and control the network.
On the other hand, with China already home to > 70% of mining (per this article), perhaps it’s more surprising this hasn’t happened already.
So either this is a tide that changes the whole world, or it's going to be harshly confronted. Doesn't matter that Tesla buys n bitcoins, or Microstrategy or whatever.
And I do have money on crypto. Not on bitcoin, not a lot, but that would against my interests too.
Money is destructive, period. And plastic.
IMO it would be enough if regulators take action against crypto exchanges. Tax outflows heavily, audit companies located in the EU, track bank transfers received from exchanges outside the EU. Controlling the exit ramps to euros is achievable. People can still trade on IRC or whatever, but the scheme is much less appealing when you don't have easy retail money flowing in to buy those coins.
If you don't then what you say make some sense, but the European Union think differently.
The EU ban things all the time.
For example: inefficient vacuum cleaners banned: https://www.bbc.com/news/business-41119355
Light bulbs banned (this didn't originate from the EU, but the EU were early)
High watt hair dryvers banned https://www.telegraph.co.uk/news/worldnews/europe/eu/1106153...
Single use plastic banned https://time.com/5560105/european-union-plastic-ban/
Bonus, Bitcoin makes capital flight and regulatory arbitrage much easier. Hostile governments will pay a large penalty.
The EU has no fiscal competence, this is left to the individual states.
I don't think much Bitcoin mining is done in the EU? Much of the EU has the most expensive electricity in the world.
From a fiscal point of view the taxation of cryptocurrencies depends on each nation. Many have already decided, by law, how to tax Bitcoin and cryptocurrencies. For example in Portugal if I'm not mistaken Bitcoin is considered a currency and gains made on currencies are not taxed. In other countries it's considered capital gains. Etc.
None of it is harmonized.
The EU simply doesn't have the authority at the moment when it comes to fiscal matters (it's the same for taxes on cars, gold, jewelry, whatever).
The EU probably can issue a rule banning mining using proof of work in the EU that'd then have to be translated into national laws: but I don't think that'd change anything.
Banning mining in China, however... That one would probably have consequences.
Now, if you were to say a nation state decides to hack the blockchain, well, I’d call that a black swan.
Everyone in the modern western Tech scene believes they're environmentalists and believes all the modified-limited-hangouts in order to continue to pretend they are. Meanwhile their iphones were made in a country that added 40 gw of coal power last year.
It's both. From the article:
In terms of helping China meet its goals of reducing carbon emissions, Inner Mongolia has not had a good track record. It failed to meet China’s energy-saving target in 2019. The central government criticized Inner Mongolia for its “serious problems with energy conservation,” according to People’s Daily, a mouthpiece of China’s Communist Party.
Chinese internal politics also include environmental regulations. If the government of Inner Mongolia doesn't want to exceed the energy consumption limit again, they need to make cuts somewhere.
Now the specific choice of banning cryptominers is a matter of Inner Mongolian internal politics. But it's unsurprising that they'd prefer local businesses over some bitcoin miners who could easily move their operation to a different province (as many of the examples in the article did.)
(I'm also dubious of how they know what is powering the mining operations inside China, most of the power in China still comes from coal.)
https://www.iea.org/commentaries/bitcoin-energy-use-mined-th...
1. bitcoin has created a market where people purchase security of their assets with the ultimate currency - energy. that market isn't going anywhere, the idea is out of the bag and you can't un-discover it.
2. energy consumption is not what causes carbon emissions, energy production does. stop chasing consumers and start regulating producers if you're honest about being so very concerned about environment.
3. it's not your business what i do with the energy that i buy at market rates.
2. Our infrastructure is only equipped to produce a finite amount of energy plus emergency output, and much of that emergency output is fossil-fuel-based. Even building new "green" plants has a high amount of carbon output due to concrete production. Energy is a zero sum game until we master fusion, and Bitcoin is the least efficient allocation of that resource.
3) Yes, it is, because the government also already regulates how much energy can be used in appliances or businesses. More broadly, it is literally the government's job to step in when a behavior is, at scale, creating a significant negative drain on society's resources for no tangible benefit.
2. .. in which you agree that producers, not consumers are responsible for carbon output. i dont get your "zero sum game" idea, we already have plenty of fusion energy available - it's called the sun. as for allocation efficiency - that's just like your opinion man.
3. i guess we'll have to wait til' you get whats the tangible benefit then...
A better way to frame the problem IMO is that if Bitcoin works as intended, it will only serve to create a new elite of early adopters that will be even more massively powerful than the traditional one
So you have a lose-lose proposition for late adopters, with collectivized costs and pollution, and basically the promise of boundless wealth for the rest. I can't blame early adopters from working towards this, but in turn they can't blame the rest from reacting.
> if Bitcoin works as intended, it will only serve to create a new elite of early adopters that will be even more massively powerful than the traditional one
sure, early adopters will reap some benefits, but it's laughable to suggest they will be any competition to current elites. a valid criticism of bitcoin would be that current elites will adopt bitcoin to cement the existing inequalities, but a) that would already be some redistribution of wealth, b) there's already plenty of wealth cementing options in form of london real estate, etc, singling out bitcoin here seems disingenuous.
You have people with London properties getting super excited and people with no such properties not getting excited at all. Both are right. A handful of previously poor people manage to get a property thanks to being in the right place at the right time or some other improbable condition, but most don't. Many participants in the market are already massively wealthy. Overall, nothing makes it plausible for the property market to be meaningfully called an engine for the redistribution of wealth
I honestly wonder when and how changing your mind became a bad thing.
Show me someone whose thoughts or ideas don't evolve and I'll show you someone who's wasting their life.
New information should ideally get people to re-evaluate their initial opinions about something (ideally).
And another thing which changed is that, every time the price of Bitcoin increases, it can (and will) use more power (the amount of power a Bitcoin miner uses is limited by how much power it can buy with the mining rewards, because if it used more power than that, it would be mining at a loss). There's a lot of difference between when one Bitcoin was USD 1, when it was USD 4000, and now that it's over USD 50000. Someone who was OK with how much power the Bitcoin network used back when the per-block mining reward was around USD 50, might not be OK with how much power the Bitcoin network uses now that the per-block mining reward is over USD 325000.
[citation needed]
> "If Bitcoin is so bad for using as much energy as Argentina, then we should stop using energy to stream entertainment, which we are doing now more than ever."
Until we get off fossil-fuel based electricity, all environmental arguments are going to be based off marginal utility. There's a trade-off.
I personally think that Bitcoin at best is an unregulated financial market and at worst fake internet money. The fact mining contributes to more energy consumption than entire countries is worrying to me. It's a problem that's only going to get worse.
On the other hand, let's look at your argument about streaming entertainment. Currently plugged into my house, I have 2 TVs and 4 computer monitors. I use these to stream entertainment (among other things). Is it wasteful? Yeah, but entertainment is necessary for a balanced life and mental well-being.
Are my 6 screens wasteful? To some extent, although most of that waste is a byproduct of manufacturing where the 'off' button doesn't turn my screens off; it just puts then in a sleep mode which consumes power. So all 6 screens consume some amount of electricity 24 hours a day. This is a problem which should be fixed.
This is a problem with most modern appliances. It contributes to enough excess energy consumption that it even has its own name--vampire electricity.
You see? People can have critiques of both at the same time. But even if you take all the vampire electricity my appliances consume, it's still a drop in the bucket compared with what it takes to mine fake internet money.
I also put my money where my mouth is! I drive electric and charge only at my employer, which uses 100% solar. I don’t eat meat. I shop at package free groceries. I eat as much local food as possible. I don’t stream movies or music.
We exist, my friend, but that’s besides the point. There are no saints in systems as complex as energy. You can only take aim at the big stuff and hope you can make an impact.
Bitcoin is entirely unnecessary, unlike eating and driving. Participating is a choice. And it’s a bad choice.
Yes, that's a problem in my view. Observing that it is the status quo doesn't rationalize it or further prohibitions to defend price controls.
I'm not sure if you would regard it as naive, but price controls are widely regarded as inefficient distortions of a market.
So the idea that price controls and nationalization somehow causes inefficiency in this case is just a tale economists tell themselves. In the real world, all of the most successful energy grids use those tools.
In other words, you're arguing against reality.
The most I could say is that there may be unseen costs of nationalization. I.e. it could be cheaper still if privatized, but that is further afield from the discussion. In HN parlance I suppose I could demand that you provide evidence and sources proving the same power stations wouldn't operate more efficiently under private ownership, but I don't think that would be fair or friendly.
It's not a business, either.
But Hydro Quebec has a total monopoly and zero competition in Quebec, by law. It's not a market.
Even if hydro itself isn't making more revenue than its direct costs, if it increases the tax revenues for the government by better uses of the electricity, the government is still making a profit
There are unseen benefits to nationalization too, not just costs
If you think that I am overextending the term free market, then you must agree that there are no energy free markets? There are two options here. Either there are, and they are all suboptimal to at least some state run solutions, or they don't exist, in which case my argument still applies.
Yes, many places have hydropower. Some have more than others. There are also population, consumption concerns relative to the supply. The Wikipedia article notes that the Quebecois authorities subsidize aluminum smelters with a goal of job creation. Perhaps the market price could be even cheaper without this subsidy?
Electricity markets are generally highly regulated, public-private partnerships or outright nationalized. I don't see a dispute here or an argument.
Observing that something is commonplace isn't a rationalization of the efficiency or morality of the practice.
>you are arguing against reality.
This isn't helpful. Different individuals have different observations, experiences, perceptions and thus opinions. That's healthy. It is the source of discussion. Would it be helpful if I characterized this turn of phrase as you arguing for an exclusive license on "reality"?
No, I don't think that would advance the discussion at all, but it would be equivalent to what you've offered in my view.
The first is way more efficient and allows for much lower electricity rates, and the second is the only way to get the economics right to allow for growth.
That comes inevitably with regulatory restrictions on what you can do and how you can do it. Forbidding people using coal power to mine bitcoin is more than reasonable and indeed typical as far as energy use regulations go.
You could do this in any centrally digitally managed currency too. You could probably do it with a blockchain currency too if you get enough people to agree to the change.
Of course, if you don't like this, there's always the gold standard.....
> You could probably do it with a blockchain currency too if you get enough people to agree to the change.
That's a huge difference. The fed can print money whenever they want, whereas with bitcoin they need to convince a supermajority of the miners and users, otherwise they end up with a forked chain like bitcoin cash/gold/sv.
I take it GP meant mining without gigantic electricity consumption: so not proof-of-stake but proof-of-work
> ... and how does it differ from regular fiat money today?
There was a discussion here a few days ago where people were trying to determine how many swiss bills were circulating... Someone commented on the irony, in a thread hating on cryptocurrencies, that anyone at anytime can know exactly how many, say, Bitcoin or Ethereum do actually exists.
There are other difference between government issued money and cryptocurrencies: for example some cryptocurrencies have a fixed, carved in stone, supply curve and so you can know beforehand exactly how many are going to be mined each year.
This is quite different, for example, from Venezuela's bolivar: Maduro just announced that 1 000 0000 bolivian bills were going to be printed now.
Isn’t there a distinction between issued/minted currency and the amount in circulation? With Bitcoin and physical cash you know how many coins are minted and notes issued etc.
But how much of that is in circulation? Does lost physical currency still qualify as in circulation? What about Bitcoin wallets long lost by their owners (such as the British man who keeps wanting a rubbish dump to search for a HDD he threw out years ago, or the person who forgot his password and has 2 attempts left until the wallet self destructs). I don’t think either currency can accurately track the amount in circulation.
For paper money, the fraction that gets destroyed is probably small enough to not matter.
but with coins/cash the actual circulation can exceed what the government claims to have issued, through counterfeits or malfeasance (ie. the government under-reporting the issuance).
If governments can subsidize the mining process, can't they also subsidize the staking process?
However, if you are claiming there's no incentive to create more efficient cryptocurrencies, I disagree. Energy efficient, faster and cheaper options exist.
Nanocurrency would be the prime example.
If you plop a mining farm down next to an existing hydro dam that was previously used for powering aluminum smelting, then that farm is now funding the maintenance of that dam. That dam then can provide power to the surrounding community. It isn't about making up a difference, it is about keeping that dam running. Oh and what's worse for the environment then wasting energy on mining bitcoin? Aluminum smelting.
This is exactly what coinmint did at an old Alcoa facility in upstate NY. They are using power that would otherwise go to waste. It is too expensive to build more transmission lines to feed power to people further away. Re-using the Alcoa facility also helps fund its further cleanup from the years of toxic waste produced there. A bunch of drone computers is a perfect use.
I'm all for shutting down coal based mining. At this point most large mining operations are not profitable on that anyway and have moved to other sources of power.
Disclosure: I am a large very scale ETH miner who uses hydro (but not at coinmint, I'm just very familiar with their facility).
All these dreams of decentralized money will be worth nothing when global warming and the associated chaos kick in.
https://twitter.com/danheld/status/1351235080103096331
It starts off with:
"1/ Bitcoin’s energy consumption is not “wasteful.”
- It is much more efficient than existing financial systems
- No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians)
Let's debunk this FUD"
Bitcoin, Ethereum etc. can be spent nearly nowhere except at exchanges because it's a pain in the ass to handle for merchants while I can pay with my Visa in the most countries seamlessly.
And how can it "bank the unbanned" when people need to have not only a smartphone but also a stable internet connection to the networks because if I don't observe the blockchain, I am still reliant on intermediates which are called payment processors in the traditional system that already exist.
Crypto currencies are just unnecessarily speed running financial history. Carried by ancaps and speculation that are only pushing it because legislation didn't catch up, yet.
It's also including households, trains, data centers, etc. Things people actually use to live. Meanwhile with Bitcoin people are just rushing to calculate as much zeros as possible into their hash to append 1 MB of data to a chain.
“No one has the moral authority to tell you what is a good or bad use of energy” followed by “Bitcoin uses less energy than than banking and the military,” implying that these are “bad” uses of energy — and in fact, that’s the entire foundation of the Bitcoin cult! That Bitcoin is better than Fiat, that it’s the righteous currency because of decentralization/etc. When you have God on your side (in this case, Satoshi, someone revered despite having never been revealed as existing...) you can justify anything. Even massive energy waste and pollution.
I find this really hard to believe. And it would really depend on what you’re measuring. If we look at transactions per second, the numbers aren’t good for Bitcoin. But really, what we’re talking about here is transactions per Watt of power. I’d love to know what these numbers are, but I can’t imagine it looks good for Bitcoin.
Maybe it looks better if you look at the total value of transactions per Watt (fewer transactions, but at high amounts). But then, Bitcoin starts to look more like a reserve currency where the major transactions are between large clearinghouses instead of a totally decentralized monetary system.
If people buy bitcoin instead of buying a new car, then the net effect on environment is positive, given that car production uses more fossil fuels than bitcoin production.
It's fine to disagree of course.
Inner Mongolia thinks otherwise apparently.
for the rest of it... I don't find that especially compelling. This feels like the definition of cherry picking specifics against a general problem.
China still built some 40 GW of coal plants last year.
how secure is that? it must be less secure than Bitcoin?