Should altcoin PoW mining be regulated/banned?

[hatshepsut93]

When it comes to PoW and altcoins, very few of them decide to use SHA256 because of the enormous hashing power amassed by Bitcoin, so even a fraction of it could easily 51% attack an altcoin. For this reason alts have turned to GPU, CPU mining, and now even things like SSD mining.

But there's a problem, this mining has created a huge demand for computer parts, the prices for them have skyrocketed to 2-4 times of the recommended price. Millions of people around the world can't get their hands on hardware for more than a year, and it's not only gamers but also professionals and researchers, while these altcoins don't create anything useful for society, only speculation as a zero sum game. Should the government step in and do something about it? The simplest thing would be do ban mining on PC parts, and order exchanges to delist all the PoW altcoins. If the US and EU would do this, PoW altcoins would be effectively dead.

[1714871598]

1714871598

[1714871598]

1714871598

[1714871598]

1714871598

[1714871598]

1714871598

[wxa7115]

When it comes to PoW and altcoins, very few of them decide to use SHA256 because of the enormous hashing power amassed by Bitcoin, so even a fraction of it could easily 51% attack an altcoin. For this reason alts have turned to GPU, CPU mining, and now even things like SSD mining.

But there's a problem, this mining has created a huge demand for computer parts, the prices for them have skyrocketed to 2-4 times of the recommended price. Millions of people around the world can't get their hands on hardware for more than a year, and it's not only gamers but also professionals and researchers, while these altcoins don't create anything useful for society, only speculation as a zero sum game. Should the government step in and do something about it? The simplest thing would be do ban mining on PC parts, and order exchanges to delist all the PoW altcoins. If the US and EU would do this, PoW altcoins would be effectively dead.

While I agree that the vast majority of altcoins are not generating anything useful at all and are either scams, bad projects and a waste of resources at the same time we need to wonder if this is actually illegal? And the answer is no, a greater demand for computer parts is without a doubt going to inconvenience a lot of people but since this is not illegal in itself I do not see the point to try to regulate this.

Also government intervention is not my preferred method to solve anything as governments have the tendency to completely distort markets by giving preference to their friends and other powerful actors, so I think it is better to let the market fix itself, whether this comes from a decrease in the demand as people realize they are investing in hardware that will not give them the profits they are looking for, or because the supply increases or both since this will not last forever.

[joniboini]

I doubt the government will step in just because some guy can't buy any gpus. If anything, that's how the free market works. If they want something immediately then they can pay more. And those professionals are not upgrading their devices every year, so I doubt they will complain that much. Just because it's rare and demand can't keep up doesn't mean you should ban everything.

[cabron]

It's the retailers of the GPUs I think should be regulated by the government not ban mining. When there is demand for GPUs normally the retailers will also be selling them for higher prices.

I think it will be just like what happened to the government of China banning BTC mining which didn't stop the miners, they just move somewhere like Kazaksthan or in Texas. Altcoin miners probably will just sell their GPUs to someone from other countries that mines altcoins.

[tsaroz]

There's no way we can regulate or ban altcoins mining as the coins or network can't be controlled or blocked by ISP. They may block IPs from some popular app but that won't stop the options miners have.
And about the hardware crisis, the hardware makers have benefited the most with crypto boom. The only sector really affected is gaming as they want the latest hardware. Video editing and other task could be performed in any good GPU and you could easily get them with a price. And for research, most of the large research institute use different forms of hardware which are custom built. And the chip shortage has affected everyone and it's not entirely the blame of crypto miners.

[Sithara007]

LOL.. the same argument is being whipped up again and again by the PoS fanboys. But be assured of one thing. PoW is here to stay. What users need is a system that is secure and PoS can't provide that. You have mentioned about the 51% attack, but how many such attacks on the Bitcoin blockchain are you aware of, ever since the first coins were mined in 2009? PoW is needed to provide security for the Blockchain. And there is no point in arguing that PoW mining has created a shortage of computer parts. The solution is not to regulate PoW mining, but to scale up the production of these parts.

[vv181]

Should the government step in and do something about it? The simplest thing would be do ban mining on PC parts, and order exchanges to delist all the PoW altcoins.

I do personally postponed upgrading my PC, and I'd wish all the parts came back to their MSRP price. But making governments to step up for that is completely not in my favour. After all, what should governments bother to "fixed" it? I mean they can completely ban cryptocurrencies at all instead of just stepping up to fix PC components parts.

Anyway letting governments to dictate what should we do in terms of personal computational power that we did to mine cryptocurrencies is a hell of a dystopian.

[hatshepsut93]

It's the retailers of the GPUs I think should be regulated by the government not ban mining. When there is demand for GPUs normally the retailers will also be selling them for higher prices.

I think it's very hard to regulate retailers realistically. If they will want to sell to miners, they will find a way.

While I agree that the vast majority of altcoins are not generating anything useful at all and are either scams, bad projects and a waste of resources at the same time we need to wonder if this is actually illegal? And the answer is no, a greater demand for computer parts is without a doubt going to inconvenience a lot of people but since this is not illegal in itself I do not see the point to try to regulate this.

Also government intervention is not my preferred method to solve anything as governments have the tendency to completely distort markets by giving preference to their friends and other powerful actors, so I think it is better to let the market fix itself, whether this comes from a decrease in the demand as people realize they are investing in hardware that will not give them the profits they are looking for, or because the supply increases or both since this will not last forever.

Governments have power to make things illegal.

It can take many years for the market to fix itself. Nvidia and AMD didn't believe that the mining boom of 2017 could be repeated (and you can't blame them), so they didn't increase their production capacities. They are still not betting on their mining products.

Or take Chia coin for example. Came out of nowhere, screwed up the whole SSD market, countless read/write cycles were wasted and nothing productive was achieved.

Anyway letting governments to dictate what should we do in terms of personal computational power that we did to mine cryptocurrencies is a hell of a dystopian.

All the mainstream fields of economy are quite heavily regulated even in western world that is often viewed as the part of the world with the most freedom. So sooner or later when crypto will join mainstream, the government will regulate it. They will never care what people do on their computers, they will simply tell exchanges and other services which coins are acceptable and which are not. Of course you could still use any blacklisted coin, but such coins will have no popularity without access to legal markets.

[Bttzed03]

~ But there's a problem, this mining has created a huge demand for computer parts, the prices for them have skyrocketed to 2-4 times of the recommended price. Millions of people around the world can't get their hands on hardware for more than a year, and it's not only gamers but also professionals and researchers,

Didn't the gaming industry also influenced the price increase of computer parts before altcoin mining became popular? Maybe not as high as today but it's still significant. Was there an attempt by the government to regulate the price hike before? It would look unfair to miners if there was none.

[Jackl87]

When it comes to PoW and altcoins, very few of them decide to use SHA256 because of the enormous hashing power amassed by Bitcoin, so even a fraction of it could easily 51% attack an altcoin. For this reason alts have turned to GPU, CPU mining, and now even things like SSD mining.

But there's a problem, this mining has created a huge demand for computer parts, the prices for them have skyrocketed to 2-4 times of the recommended price. Millions of people around the world can't get their hands on hardware for more than a year, and it's not only gamers but also professionals and researchers, while these altcoins don't create anything useful for society, only speculation as a zero sum game. Should the government step in and do something about it? The simplest thing would be do ban mining on PC parts, and order exchanges to delist all the PoW altcoins. If the US and EU would do this, PoW altcoins would be effectively dead.

It seems to me that PoW mechanisms are not really the future of the cryptospace, no matter if its PoW with dedicated mining hardware, GPU's, CPU's or SSD's. The reason for that is pretty simple: unnecessary energy consumption. We are in a time where the climate change is probably the most discussed topic in most of the countries in the world right now, at least in the western world and it would not be to smart for crypto projects to choose PoW as their consensus mechanism because that would be very unpopular in the current political environment. Consensus mechanism like PoS are way more light in terms of hardware requirements and energy consumption.

[vv181]

All the mainstream fields of economy are quite heavily regulated even in western world that is often viewed as the part of the world with the most freedom. So sooner or later when crypto will join mainstream, the government will regulate it.

There is no doubt that regulation is inevitable.

They will never care what people do on their computers, they will simply tell exchanges and other services which coins are acceptable and which are not.

Still, I doubt that will likely to happen. Banning all of PoW altcoins would be devastating, IMO.

Governments regulation main concern currently focused because they having a lack of control over terrorism financing, money laundering, and illegal activity. Not because the miner massively penetrated the computer parts markets. I don't see they will specifically regulate PoW altcoins. At the very least even if they would to do so, the causal wouldn't be because of the gamers couldn't get their PC parts, or professional/researchers having lack of access to the desired computational/hardware power.

[hatshepsut93]

It seems to me that PoW mechanisms are not really the future of the cryptospace, no matter if its PoW with dedicated mining hardware, GPU's, CPU's or SSD's. The reason for that is pretty simple: unnecessary energy consumption. We are in a time where the climate change is probably the most discussed topic in most of the countries in the world right now, at least in the western world and it would not be to smart for crypto projects to choose PoW as their consensus mechanism because that would be very unpopular in the current political environment. Consensus mechanism like PoS are way more light in terms of hardware requirements and energy consumption.

Energy consumption is not really a problem there's plenty of energy around. Bitcoin is consuming only 0.1% of global electricity, so it's responsible for even smaller fraction of global emissions. But the impact on consumer electronics prices is far more noticeable.

Governments regulation main concern currently focused because they having a lack of control over terrorism financing, money laundering, and illegal activity. Not because the miner massively penetrated the computer parts markets. I don't see they will specifically regulate PoW altcoins. At the very least even if they would to do so, the causal wouldn't be because of the gamers couldn't get their PC parts, or professional/researchers having lack of access to the desired computational/hardware power.

Yes, governments usually don't act until they have an interest in it.

[Hamich124D]

I have read somewhere that nvidea started to enginner their GPUs to output less hashrate making them less efficient in mining. so thats a good step towards decreasing the huge demand on  graphic cards right now.

I dont think you can really ban or regulate mining because people will always find a way to hide their mining farms, a  good solution will be to start mass producing those antminers  so miners can switch from GPUs to  specialized mining hardware althought i dont think this will possible in the near future considering the  selicon shortage the world is facing right now,or maybe goverments can start forcing mining rigs operators to use clean energy to run their farms (again its hard  for this one to work because of the reason mentioned earlier)

[timerland]

I don't think so.

Altcoins can run whatever algorithm they want. And I'd say that most of them have very little hashpower compared to bitcoin anyway.

How would you enforce a ban on PoW alts anyway? There is simply no feasible way of doing so if you think about it - unless you are an authoritarian government.

[letyouearn]

Why ban PoW? Just produce and sell more equipment This will also increase GDP, create some work places and let people spend their money the way they want to.

[TheUltraElite]

Buying equipment is not illegal. Mining or minting coins that have no value to you might not be a good defense in a democratic country where people wish to mine them. So in that sense, governments cannot ban such coins from being mined, moreover it only creates more tension in the already edgy bitcoin economy where everyone dreads getting persecuted.

However I do agree that equipment manufacturers are going to be in a lot of profit from these sales. Trying to stop them from buying would be bad for their own business so they would not do that. However they may put in specific counter measures to prevent people from mining on their devices which in turn also turns their revenue against them.

This situation is pretty sticky indeed. But I am sure some middle ground will be achieved in due course between the governments stopping shitcoins and chip manufacturers.

[Argoo]

Why ban PoW? Just produce and sell more equipment This will also increase GDP, create some work places and let people spend their money the way they want to.

In any case, neither governments nor any other state or public authorities should interfere with the current situation with the mining of the PoW algorithm. There are arguments for and against their use, but this issue should be resolved by the cryptocurrency market, and not administratively.
States can resolve issues related to the release of video cards and, in general, any technical issues related to cryptocurrency. However, no one has the right to decide for citizens what types of activities they should be engaged in, if this activity is not prohibited by law.

[Silber]

Should the government step in and do something about it?

Do you want to live in a free society or do you want to live in a totalitarian society?

A free society will give you the coiche, and you decide if you want PoW in your live or not.

A totalitarian society will make all decisions for you and the henchmen will always appoint to a higher purpose - like banning PoW because of the environment...

[hitsnorth]

I'm partially agree with you. But i don't think government should interfere. There are bigger problems than useless coins and gamers which can't buy GPU or buying it for triple price.

[vv181]

Yes, governments usually don't act until they have an interest in it.

Which It came to my conclusions. Governments should not handle, specifically to control the Pow Altcoins. Not for now and also I believe in the foreseeable future. Do governments have the power to ban it? of course, but I believe there will be public pressure. Even if for whatever sake the governments mandating to ban Pow altcoin, on the other hand, it will be disastrous for cryptocurrencies especially Bitcoin, because let's say they have an interest in banning PoW altcoins, I'm sure they will also want to limitate bitcoin mining activity since they have a reason to specifically ban Pow altcoins.