Letter in Support of Responsible Crypto Policy

This is where you lose me. Cryptocurrency makes most transactions considerably more difficult, and so far, the one segment of the economy that has consistently been willing to accept those tradeoffs is the criminal world. No one is going to argue that the law is always right or that criminals are always wrong -- after all, Oskar Schindler and Aristides de Sousa Mendes were criminals -- but what you are arguing here is that it's important to retain a tool to subvert the law for when the law becomes unjust.

I'm not saying you're wrong! I just happen to believe the harm of bad crime enabled by crypto outweighs the positive effects of crypto-enabled crime, but that's a personal opinion and one that might change if the world does. People in the US make a similar argument about guns (that retaining the ability to overthrow a tyrannical government is worth the extra gun crime we have to ensure); I disagree with them, too, but I would not be so sure if I lived in eastern Ukraine today or Berlin in 1941.

The network does flip from secure to insecure whenever the cost of mounting a 51% attack dips below the amount an attacker could expect to gain. Markov and Schoar [0] made a convincing case last year that as minted rewards from mining drop, the active mining pool will naturally shrink and become more and more vulnerable. PoW does not prevent misbehavior; it establishes an incentive system to encourage participants to behave properly, and that incentive is subject to realignment by market forces.

[0]: https://www.nber.org/papers/w29396

[0]: https://www.sciencedirect.com/science/article/abs/pii/S09213...

Think about it for a second - of those $900 million in transaction fees, how many of them were transactions involving legal vs illegal activities? Anyone involved in legal activities would have a much easier time and lower fees using ACH, wire transfers and other methods.

Lacking viable uses outside of the criminal underworld and speculation, this is wasted energy. And it will only keep growing unless regulators step in.

It can be solved through Pigovian taxes on externalities (carbon emission mainly). But it should apply to all industry fairly, and our energy-industry lobbyists will hear none of it.

That the system of Bitcoin users could not exist without that impact is literally what I mean by encoding that political idea.

> It is regulated by the economic majority.

That definitely sounds political. Why not a democratic majority?

Why is the protocol defined like it is? Could it be... politics, perhaps? What kind of things does the protocol encourage, and what kind of things does the protocol discourage? Could there be a political ideology described in those things?

There is no mechanism to replace coins to which private keys have been lost. There are most certainly deflationary pressures that are being compensated for by mining new BTC, but eventually new coin minting will happen less often than coin access loss, leading to an overall deflationary system.