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Comment by perihelions | Hacker News Reader

It's absurd to tax something that can so easily migrate to a different country. Of course, crypto mining is absolute wasteful crap. But this tax doesn't decrease the global crypto mining rate: all it does it shift the mining to a different country. And: unlike a lot of industries and heavy manufacturing, the local impact of a crypto mine is very one-sidedly positive—large amounts of cash injecting into the surrounding economy, particularly the energy sector and everyone who works in or profits from it.

I do agree that (this type of) crypto mining is a sad waste of resources, and globally suboptimal for the world economy. But there's more to rationality and to morality than making performative gestures against bad things.

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Nah,pushing through negative externalities of wasteful industries to other more desperate economies is a cool use of first world power.

Also strong disagree that local impacts of crypto mines are net positive - here in Texas we have to pay miners not to burn electricity for their fantasy dollars just to keep the AC on at grandma's house in the summer.

Good riddance.

> here in Texas we have to pay miners not to burn electricity

It seems like lunacy when you put it that way.

But I'd rather pay crypto miners to shed load during peak times rather than suffer blackouts at hospitals, chemical plants and water treatment facilities.

Grid stability isn't a joke, and sometimes the least-bad option is still bad. Until we have better storage solutions, flexible demand is a necessary evil.

Maybe paying miners not to mine is a lesser evil than paying even more to spin up filthy coal peaker plants and still have rotating outages.

Spot on. I literally had this same exact conversation today with the head electrician at a large bitcoin mining farm.

Another great way to shed load is just turn off their power and not pay them at all.

What it is now is effectively extortion.

Yes, this tax proposal seems to presume that the mining being done is a value-adding operation. However, an adversary desiring to undermine the electrical grid could just set up servers sending back cryptographic proof that they executed some useless inner loop. Who even knows with all the various crypto-coins now.

He's also missing that this extra load is driving base demand, which is a big driver of increased capacity installation. In some sense paying crypto miners (and factories, and increasingly amalgamated groups of home owners using smart thermostats to increase the set point 10-15 degrees higher, etc.) is the best solution until storage becomes viable. They are flattening the demand curve across the year when they drop off at high demand times and are there for the rest of the time, and that's actually pretty useful.

>fantasy dollars

If you include all fiat currencies in that category I think that's a keen name.

If it's just a title to bad-mouth crypto in some arbitrary way -- well -- a lot of very real stuff has been bought with crypto, and name-calling generally attracts the very worst allies.

I get the energy concern, and mostly agree with you, but i'm not sure we should pretend that fiat currencies have these problems fixed.

Military backing for the sake of currency stability requires X amount of energy daily to facilitate, it's just not draining Texas. 'Not my problem'?

Other fiat currencies don’t take a bunch of energy to mint. Fiat metals (whose values are worth more than their practical use), however, do have a cost to extract and refine, so it’s not like crypto currency is alone here.

> If you include all fiat currencies in that category I think that's a keen name.

All currencies are fantasies: rocks,[1] sea shells, paper, bits.

Money is an human invention[2] and social contract[3] to help in interactions for goods and services.

[1] https://en.wikipedia.org/wiki/Rai_stones

[2] https://www.goodreads.com/en/book/show/50358103

[3] https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

Proof-of-work crypto mining is particularly egregious because it is quite literally zero sum. The world's Bitcoin miners could spend 100 watts mining crypto or 100 gigawatts mining it and due to the nature of the algorithm, the outcome would be the same number of mined blocks.

Crypto mining injects virtually zero dollars into the local community. If this passes, and miners move to, say, Mexico, what benefit does that grant Mexico? They'll have higher local electric costs. The bitcoins will be sold internationally and the owners will keep the money wherever they live.

Buying electricity (wasteful as this use is) is an injection of cash into the local economy.

That’s not a given. If the local power plant is owned by a foreign investor, and there isn’t a reasonable tax on the electricity, there’s very little money going into the local economy.

Both the mining itself, and many forms of electricity (especially the cheaper kinds), do not require a lot of labour.

No. Margins on power delivery are marginal. Very little of the money paid for power stays local.

The bulk of the money goes to supply and transportation, which is usually a foreign state or a trans-national entity of some kind, far far from the point of consumption.

Mexico (in this example) could try to siphon off money through a tax or regularion or by investing capital in local supply, but the OP believes taxes/regularions are just a way to foreclose on any opportunity because the miners will just go elsewhere, and investing capital in growing local supply means redirecting it from somewhere else (assuming you can even make local supply price competitive without subsidies).

Some spending can stay local and benefit local economies. Spending on power is generally not one of those.

Do you have a reputable source on that?

I was at a large bitcoin mining farm today and talked to them about that. Their substation feeds the local community and they paid for upgrades to it so that the local community could have a more reliable source of power. Their funds also go towards maintaining all the lines that feed the community too. They employ about a dozen people from the area. We ate lunch at a local restaurant. Bought groceries from the local grocery store. Staying in a local airbnb.

Does this count as reputable?

Since it's a personal anecdote from a biased source, I'd say it's probably not reputable.

I this case, I find that response weird because I'm being factual about spending money in a local community that surrounds a large bitcoin mining operation.

The bar for proof here is pretty low, it isn't like I am claiming to prove that the MRNA vaccine works or not.

Do you need to see my receipts for purchases at the local stores? My airbnb account?

Much of the developing world operate their grids at a loss (so basically subsidized). Parts of China had to ban bitcoin mining because miners were using a lot of underpriced electricity to mine bitcoin to noticeable effect.

> It's absurd to tax something that can so easily migrate to a different country

It creates an incentive in that country to tax it. If you have followed EU's Carbon Border Adjustment Mechanism, it is exactly how the EU intends to export its legislation. It says: your imports are going to be taxed on their CO2 emissions, unless you implement a tax of your own on their CO2 emissions. The exporting country now has every incentive to tax it and remove the tariff.

They can shoulder the power grid for it then. Still a win.

In many cases, US jurisdiction does not end at its borders, and they can’t outlaw crypto entirely (yet). You get done what you can get done, even if it pushes the externality to a country without the appetite to tackle it. That’s their power grid’s problem.

I feel instead of taxing it we should just make it illegal and toss people in prison for doing it. If it goes to another country that's their dead weight loss.

> the local impact of a crypto mine is very one-sidedly positive—large amounts of cash injecting into the surrounding economy, particularly the energy sector and everyone who works in or profits from it.

driving up costs of electricity due to increased demand and encouraging the continued use of fossil fuels isn't positive. it is good for the wealth of the energy sector but a negative drag on everything else.

Better things aren’t possible! Go centrism

This is national policy-making, so why would a country care about the effect outside of its borders?

I understand that US national policy is not done in a vacuum, but it seems reasonable for a nation to start with its best interests in mind.

What do you think?

> I do agree that (this type of) crypto mining is a sad waste of resources

Wait until you hear about generative AI spam!

https://news.ycombinator.com/item?id=39670900

We might need a Dyson sphere around the sun to support AI porn. And everyone thought EVs would bring our grids down.

> doesn't decrease the global crypto mining rate

It doesn't- but why would Biden care about that? If it moves to a different country then it reduces demand in our local grid. That's a GOOD thing.

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