Ah yes, let's ban random uses of electricity, instead of addressing the root cause: actual emissions being taxed or limited.
As-is, currency mining is an effective means to leverage low electricity prices around the world and is very-often more lucrative than producing things we actually use to improve our standard of living. Suppose you impose carbon taxes, you'll (often) be preferentially biasing towards mining over e.g., aluminum or glass manufacturing, driving physical goods shortages. And even if the entire grid were renewables, you haven't really solved the "it's more profitable to make digital goods than physical ones" problem.
So you search for regulation that is biased against the digital currency but not against uses of energy. Maybe a digital currency transaction fee, like a sales tax, that puts a ton of drag and downward pressure on the currency? It could be huge, and it could be modulated by the energy use that any given currency represents or the CPI. Of course you have the cooperation problem; taxing the life out of a currency in one country is only modestly useful.
It's a thorny problem.
why isn't digital goods just as useful? I dont think you can just assume that making physical goods is _always_ going to be better.
Let bitcoin miners mine. tax carbon emissions from energy usage, and let the free market choose the right allocations based on prices, demand and supply. The free market works when externalities are accounted for using regulation.
why would digital goods crowd out physical ones? You're assuming some zero sum game - which isn't true in economics.
Even if there's finite available energy, it won't crowd out physical goods - people would choose to spend their dollars to achieve maximum utility, so demand for physical goods would still be there, even if digital goods grow in value.
Low value-add physical goods production decline until their price rises to be worth producing vs mining. Why make concrete or aluminum if the energy can be more profitably spent on coins? The problem is that this drives commodity inflation in exchange for more digital goods that don't actually make us more comfortable as a species.
Proof-of-work currencies feel like machinery of grey goo.
Bitcoin is a digital good that has some utility (as people pay money for it). Some people assign some sort of morality/ethical aspect to bitcoin, claiming that it isn't useful. The gist of my argument is that those claims are wrong, because utility can only be demonstrated by the person paying (aka, the act of paying for a goods is what demonstrates that goods' utility).
That's debatable
> The more money paid, the more utility that goods have.
This is just false
> The gist of my argument is that those claims are wrong, because utility can only be demonstrated by the person paying
This is quite a stretch, as any Ponzi scheme will demonstrate.
well, i am under the impression that people aren't being lied to about their purchase. Bringing in fraud in a discussion about economic value and utility isn't really helpful.
What makes something have utility? Why isn't the money paid representative of the utility (outside of fraud and crimes etc)?
what
> Bringing in fraud in a discussion about economic value and utility isn't really helpful.
But it is helpful.
> What makes something have utility? Why isn't the money paid representative of the utility (outside of fraud and crimes etc)?
Let's say you've been sold the Golden Gate Bridge. You paid a million dollars for it. Does it have any utility for you?
There are purely speculative assets whose utility only lies in speculation (that is, how much you can con the next man to extract some profit from assets you bought from the previous con man). They have zero utility outside the speculation.
There are assets that have no utility beyond short-lived novelty or bragging rights to the person who buys them such as "buy a sq. ft. of land in Scotland and get a meaningless title to go with it".
And so on.
The fact that you pay money for something says literally nothing about utility of that something.
well, you have to ask why somebody might've paid a million for it. For example, if owning the asset means you can charge a toll, then yes, it has utility, and presumably, you've done the sums and found that the utility is equal to, or greater than a million dollars - therefore, you paid for it.
> There are assets that have no utility beyond short-lived novelty or bragging rights
perhaps those bragging rights are useful to those who are doing the bragging. Who are you to say that it isn't utility? Just because from your point of view it is useless, doesn't mean anything.
> The fact that you pay money for something says literally nothing about utility of that something.
and this is where i think we disagree - i am assuming a rational actor. I assume that anyone would only pay money if they feel their spent money gives the equivalent utility, or else they wouldn't have spent it!
Which is why i said fraud is irrelevant in this argument - if you were sold what is meant to be diamonds, but only got glass, then yes, somebody lost utility. But it doesn't mean the original thesis - paying for diamonds - wasn't correct.
That's why I said, we need to define utility first. To you, all utility means is that someone paid money for it. Then I have a Tower of Pisa to sell to you.
> and this is where i think we disagree - i am assuming a rational actor. I assume that anyone would only pay money if they feel their spent money gives the equivalent utility
Yup, beacause as we all know all people engaged with Bitcoin are rational actors. Fraud is definitely not irrelevant in this argument, but highly relevant. For example, while members of a Ponzi scheme feel that their money are well spent, the real utility of that is?..
if they are lied to, then yes, they've wasted their utility. But if they weren't lied to - aka, they know full well what they're buying - then, how they feel _is_ the utility. Why is this any different than, say, going on a cruise ship that expends the equivalent amount of energy?
A transaction is not a waste just because some people (who weren't part of the transaction) believe it to be wasteful. Only those involved in the transaction can determine that metric. Regulation needs to be in place so that externalities are part of the transaction - which is why instead of stopping bitcoins, the energy usage (of anything, including bitcoin) should have a carbon tax.
That's not how any of this works.
so you have just asserted but not given any reason.
From this, it's quite obvious to infer that physical goods are more useful than digital goods, it's not even a contest.
It depends on the digital good. In order to make essential necessities to anywhere near scale of our needs requires automation. So these digital goods are an essential precursor to our physical necessities. Maybe they don't need to be produced on the scale of physical goods but every essential industry such as food, water, medicine, and shelter depends on so-called digital goods.
Entertainment is just as important to keeping society running as physical essentials.
First of all, there exists physical entertainment. For example, my family loves to play cards after a big family dinner.
Second of all, it's just not as important. Lack of entertainment will cause a society to break down over time, while a lack of food will destroy society overnight.
it's not. You are defining "more useful" using your own personal viewpoint. The truth about what is useful can only be determined by the buyer (paying money).
Ironically banning bitcoin would make mean a bunch of forks doing the same thing as monero making it useful again for more than gambling.