I didn't realized that Kazakhstan is one of the top giant miners in the world. Is there any reason for this one?
Kazakhstan to restrict crypto miners amid power shortages
91–100 of 361 posts
Re: Kazakhstan to restrict crypto miners amid power shortages
#92And so it begins. In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive. Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power). And at best crypto provides extremely limited utility for s…
Taxation could be a solution though, with rebates for low-income people and individuals. This means that the disadvantaged still get access to cheap power, where as crypto miners have to pay the (taxed) price which makes their operation less profitable.
It's not uncommon for poor people to not have spare money to float some taxes to the government for up to 12 months until they can get their rebate at tax time. That's assuming that the rebate is easy enough to get for 100% of those eligible to claim it.
This seems strictly worse than just taxing "mined" bitcoins more harshly.
Re: Kazakhstan to restrict crypto miners amid power shortages
#93And so it begins. In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive. Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power). And at best crypto provides extremely limited utility for s…
I'm a bit of a crypto enthusiast, but I generally agree that crypto-mining suck too much power out of the grid for it's current utility level.
However, your comment is a bit short-sighted and doesn't account for the switch of Proof-of-Work to Proof-of-Stake algorithms that is currently happening. PoS use A LOT less power and doesn't need extensive mining farms. See also: https://blog.ethereum.org/2021/05/18/country-power-no-more/
The only remaining question is: are we going to transition away from bitcoin, the largest PoW bastion, or not ? Probably, yes.
Re: Kazakhstan to restrict crypto miners amid power shortages
#94And so it begins. In the developed world in particular, we're seeing the move away from fossil-fuel power. This is good but currently relatively expensive. Crypto mining is starting to have very real impact on the ability of other people to live. It is adversely and disproportionately affecting poor people (who pay a greater share of their income for power). And at best crypto provides extremely limited utility for s…
> And at best crypto provides extremely limited utility for society.
Whenever you sell it, if you generated a profit on that sale, you are going to pay taxes on it (at least in the US).
That's a real value for society. Can it ever be enough to offset the added squeeze on the electricity grid (which we really don't need right now, with EVs coming on and our grid in serious need of upgrade/expansion)? Someone will have to do the math on that.
Re: Kazakhstan to restrict crypto miners amid power shortages
#95Crypto helps accelerate the growth, demand, and build-out of renewable energy.
Re: Kazakhstan to restrict crypto miners amid power shortages
#96Earlier quoted context omitted.
Yeah, "cost" is one of the fundamental terms of economics. So is "externality".
What's the externality of using electricity?
Depends on the situation. If there's a shortage (or near-shortage) of supply, the externality could be causing a partial or total blackout.
Re: Kazakhstan to restrict crypto miners amid power shortages
#97Wouldn't it make more sense to just let the price of electricity go up?
Thats the weird thing, the more you use, the cheaper it can be delivered to you, same with gas. It should be the other way around, the more you use, the more expensive it should get.
Re: Kazakhstan to restrict crypto miners amid power shortages
#98Earlier quoted context omitted.
If mining is a net positive for Kazakhstani miners, doesn't that make the country better off? That's a net export.
>If mining is a net positive for Kazakhstani miners, doesn't that make the country better off? How does that work?
Trickle down economics kicks in, surely.
/s
Re: Kazakhstan to restrict crypto miners amid power shortages
#99Earlier quoted context omitted.
Yeah, "cost" is one of the fundamental terms of economics. So is "externality".
What's the externality of using electricity?
Pollution (most electricity production is still coal-based), raising electricity prices for everybody else, contributing to an ongoing energy crisis (electricity is going to start being rationed in Kazakhstan).
Electricity is a finite resource.
Re: Kazakhstan to restrict crypto miners amid power shortages
#100Earlier quoted context omitted.
Maybe it would make more sense to you, but not to most people I think. Electricity has much better uses than cryptocurrency.
All big scale BTC mines buy at industrial prices. You cannot run a mine bigger than what your wiring can support in your apartment. None of them is using the subsidised residential rate.
Residential rates are not typically subsidized, they are regulated and billed at cost plus. The only thing that can be called a subsidy is a delay in raising costs. When local utilities are required to supply at a fixed price and that fixed price is less then cost + fixed profit margin, then they are losing money. The remedy for this is to ask their regulators to change the fixed price to account for both the higher expected base rate and their losses during prior periods. The utility commissions which regulate them almost always grant such requests. In extreme cases, CA power crisis, this can bankrupt utilities but in simple shifts of the demand curve most utilities have great credit ratings and can borrow to cover opex during the shortfalls.