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Author Topic: Would a Carbon Tax Help Bitcoin?  (Read 111 times)
ModelT (OP)
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June 08, 2021, 12:56:56 AM
 #1

Would a universally imposed carbon tax (on all Green House Gas generating activities) be good for Bitcoin?

The below video points out that energy generated by fossil fuels creates negative externalities that are not accounted for in the price.
Users of this energy (like bitcoin miners, Christmas lights, etc.)  unfairly profit from this at the expense of those who are not using that energy. This leaves bitcoin open to attacks of wasting energy and being bad for society.

Antanopolos also point out that miners will tend towards the cheapest form of electricity...if a carbon tax makes renewables the cheapest form of electricity for all bitcoin miners, then all miners would use renewables. He implies that miners might be more nimble at switching than others, which could give bitcoin an advantage in a true carbon priced economy.

In short, he is saying that if you can properly price all externalities, then you can let markets decide what is valuable and what is not. To me, this is a more objective and fair form of government regulation rather than the often times subjective, politically motivated and piecemeal regulations that we currently have. Would we be better off having a single debate about what the cost of GHG emissions are rather than having 1,000s of debates about the pros and cons of various GHG emitting activities?

Bitcoin energy consumption by Andereas Antanopolos
https://www.youtube.com/watch?v=uvFqEofdAZ0




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June 08, 2021, 01:57:48 AM
 #2

I don't see why Bitcoin needs a Carbon Tax. The Price is directly influenced by the Cost per Energy to mine the crypto. People seem so concerned about a feasible store of value and the energy usage it practically converts to a usable P2P currency system, when they should be concerned about the 3 TVs, 5 Smartphones, Appliances and other useless gizmos around their house.



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June 08, 2021, 02:14:27 AM
 #3

It may damage the total mining hashrate. However it would also make the cost per hash higher.

Sum of the cost matters. So no help , no damage either.
Nhazwrath
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June 08, 2021, 02:26:57 AM
 #4

Carbon tax is based on the idea of global warming which seems to be based on some incorrect ideas.   (what is the primary greenhouse gas)  a question never asked by media.   If you think its carbon dioxide(CO2)  I think that this is a excellent example of the media assigning to you your opinion on the matter.


Politicians see it as a guilt driven revenue source. 

You might as well call it a "feel good tax"

so MY opnion on the matter is   No.  all it will do like ALL TAXES is drive up the price.
TOM Bb
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June 08, 2021, 03:29:24 AM
 #5

I think it will help Bitcoin, because Bitcoin mining consumes a lot of electricity, and electricity is generated by coal mines. The adjustment of coal mine tax will help Bitcoin to a certain extent, which can reduce the cost of Bitcoin mining. The Bitcoin market has injected a certain amount of vitality.
Fundamentals Of
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June 08, 2021, 03:35:40 AM
 #6

Help in what way? Generally, it is neutral. A carbon tax does not help Bitcoin at all, in the same way that it also does not do it any harm. So it has basically nothing to do with Bitcoin getting help or not.

But it will definitely be good for the environment. A carbon tax would encourage or even push industries including the Bitcoin mining industry to choose environment-friendly options. And if the proceeds of the carbon tax is used to revitalize the environment, it is even better.

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dkbit98
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June 08, 2021, 09:32:08 AM
 #7

Would a universally imposed carbon tax (on all Green House Gas generating activities) be good for Bitcoin?

I think that if we all stop breathing process that is producing Co2 it will help some very rich individuals who are proposing crazy things like global carbon taxes, and this will not help Bitcoin in any way.
Not to mention that all plants need Co2 to live, so maybe solution is to plant more trees instead of creating more dystopian taxes to make rich richer and other people slaves.
Separating from current countries and creating new free states like Liberland and using Bitcoin would be great.

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June 08, 2021, 09:47:31 AM
 #8

Would a universally imposed carbon tax (on all Green House Gas generating activities) be good for Bitcoin?

All activities that generate CO2 over certain amounts have to buy green certificates to compensate.
All activities that generate very low amounts of CO2 are rewarded with green certificates.
So we can tell that some sort of punishing the polluters does already exist. It's not a carbon tax, but still...

Now, the problem is the perception. Bitcoin activities don't generate CO2. The companies producing electricity from coal or oil byproducts do. And those who produce the dirty electricity have to handle the green certificates i.e pay for what pollution they make. And yes, they should have that reflected in the price of the electricity. And from that point, Bitcoin miners will decide for themselves whether to relocate or not, based on the electricity price.

As simple as that.

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June 08, 2021, 09:51:43 AM
 #9

Would a universally imposed carbon tax (on all Green House Gas generating activities) be good for Bitcoin?

Depends on how it would be applied, but in the long run I think so.

The thing is that Bitcoin does not increase carbon emissions directly, like, say container ships or factories. There's hardware that needs to be produced and shipped, sure, but a big part of Bitcoin's carbon footprint is its electricity usage. At least the part that is drawn from non-renewables.

Accordingly Bitcoin miners would get hit by a carbon tax almost exclusively indirectly, that is by an increase in price of non-renewable energy. Now this may lead to miners that solely rely on non-renewable energy winding down their operations, however this only means that those mining operations would get replaced by more ecologically sustainable ones. Mining will always reach an equilibrium and if it's an (almost) carbon neutral one, all the better.


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June 08, 2021, 10:47:26 AM
 #10

Would a universally imposed carbon tax (on all Green House Gas generating activities) be good for Bitcoin?
Depends. In the first place, you're going to levy a pigovian tax on the electrical production. That eliminates the negative externality as Bitcoin doesn't necessarily affect the environment directly. The cause of the negative externality is primarily the production of the electricity.

Now, it could be great for Bitcoin as you're going to have lesser people arguing that Bitcoin produces too much environmental pollution as the negative externality is accounted for. This doesn't necessarily means that the act of mining doesn't affect electrical production but it is bound to drop given an increase in the cost, -ve externality being internalized. Same can be said for any other activities that requires electrical consumption.

It could be bad for Bitcoin as there are now lesser miners, which affects the security. Forcing miners to certain kinds of energy can be potentially detrimental to the community; if the government doesn't regulate the electricity, then miners would be using far too much electricity from a certain source (which doesn't have carbon tax) and thus negatively affect the community around them. I doubt this would happen, electricity market is often regulated with the local government.

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June 08, 2021, 11:46:48 AM
 #11

Carbon tax is one of the biggest scams in recorded history. If implemented, only the western corporations such as Exxon and Shell would end up paying it, as the largest petroleum producers (Saudi Arabia, Iran, Russia, Qatar.etc) would just ignore it. In the end, it will overburden the already heavily taxed western corporations and ordinary consumers. If we want to reduce global emission levels, then it has to be a combined effort. It is not the sole responsibility of the developed nations to keep the emission levels under control.
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