Californian Democrat Congressman: Bitcoin Needs a Carbon Tax

Guest essay by Eric Worrall

The mind boggling energy burn required to verify each bitcoin payment or currency transfer is finally attracting the attention of Democrat Party climate advocates.

A Silicon Valley congressman says energy consumption from Bitcoin mining needs to be taxed

And all that power usage — and its effect on the environment — is catching attention on Capitol Hill. In an interview with Business Insider, California Rep. Ro Khanna said that Bitcoin mining should be regulated in the same fashion as proposed carbon taxes.

“You could have environmental regulations of what could be used or a tax on the use of the mines that are going into the bitcoin, so that if they have externalities that they’re causing the environment, that they have to pay a tax on that,” he said.

Khanna, who represents part of Silicon Valley, added that a tax on bitcoin transactions’ energy consumption “would provide a disincentive” and “that mining that’s being used for bitcoin, they need to be paying a price on it.”

Read more: http://www.businessinsider.com/ro-khanna-energy-consumption-bitcoin-mining-tax-2018-2/

Reading his Wikipedia entry, Congressman Ro Khanna seems to have an unusual mix of qualities for a Democrat. In 2016 Khanna was vice president of a green utility business, aimed at improving energy efficiency. Khanna is very pro-education, he supported Bernie Sander’s college for all initiative. Khanna also sponsored a successful bipartisan Veterans education bill, the Valor Act. Khanna appears to be a hardline non-interventionist with regard to foreign policy.

It seems pretty ballsy for a Congressman whose district includes part of Silicon Valley to criticise Bitcoin, even though I disagree with his reasoning and conclusion. Fortune favours the bold.

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126 thoughts on “Californian Democrat Congressman: Bitcoin Needs a Carbon Tax

  1. Bitcon yes well they’ll find out the hard way. Anyone who thinks Bitcon has a future is stark raving mad, delusional and ignorant of the need for governments to collect tax to pay for all the services that Bitcon boys and girls demand for their cosmo lifestyles. Oh no all that sovereignty safety stuff and health and education stuff just gets paid for by other people; go away and don’t bother me with your trivia. Bitcon is in a government and bank free zone silly . . . didn’t you know that?

    • It sounds to me like Bitcoin is more trouble than it is worth. Especially to a person like me who has no Bitcoins and no desire to acquire any. A few people seem to be benefiting at a huge cost to the rest of us.

      • “A few people seem to be benefiting at a huge cost to the rest of us.”
        But if what you say is true, then the whole thing would just be a… a…. a Ponzi Scheme!!!
        Oh noes say it isn’t so!!! So many Smart Smart People could never fall for a Ponzi Scheme again, could they??

      • my take on crypto shifted a lot since I first begun to understand money and learned my simplistic view was inaccurate. I learned that in the 1890’s property in Australia had skyrocketed to being ‘worth’ million of pounds (pre-decimal, actual pound values).. until it crashed.
        When the banking system crashed and wiped out families, businesses and even government, laws were passed to prevent it happening again – the essence of it was that banks were printing ‘money’ far in excess of the wealth they actually held. They justified it same as they do now “if we lend a million dollars to someone to buy a house then we hold a million in assets , ergo (circular logic) the wealth is preserved by a million dollar house”. The Currency act was passed here to prevent banks ‘inventing money’ and printing paper money. No one could print money any more except the government. Everything got better then in the 1930’s the banks did it again, extending credit far beyond the banks wealth capacity. Crash..
        The law was changed again to prevent this pump and run scam. In the 1980’s Paul Keating’s labor government deregulated the banks and now armed with fictional electronic cash, they once again flooded Australia’s economy with fake money – but they haven’t broken any laws.. they didn’t print a thing!
        there’s 32 billion in actual printed cash according to treasury, yet there’s 2 trillion in ‘money’ in circulation.
        Isacc Newton, clever bloke, set gold as a money standard for a very good reason (and he hunted down and had counterfeiters and forgers executed for the same reason) – money is a preservation of wealth, of time, of labor – of your LIFE. tampering with the value of money destroys economies and lives and industry.
        He chose gold because of it’s scarcity. You want more sure you can mine it, but the energy required is what stabilizes it’s value – if wages are high, extracting it becomes uneconomical , if wages are low, mining it becomes viable – it self buffers against rampant mining as the wealth extracted from the mine distributes through the population and renders mining uneconomical.
        but the core of it was the money you earned and held preserved it’s value- and it was YOURS. you carried the value in metal in gold, silver or copper in your pocket (unless you were so wealthy you had to entrust it to a bank)
        His system saw inflation running at 0.1% per decade. Inflation by the way is actually *devaluation* of moneys capacity to hold it’s value. Now think – in an ever increasing population shouldn’t money do better than just hold it’s value, shouldn’t it become more scarce, driving wages, costs and prices down as scarcity increases? Yes – but that’s where the bloody banks step in pumping fake money into society – that’s where inflation comes from.. their effectively counterfeit fake dollars dilutes the real money – eroding it’s value as a commodity.
        Bitcoin is actually a perfect money in a way. It is owned by no country so just like gold, it’s got value everywhere and that value isn’t determined by who’s portrait lies on a sheet of paper issued by a government. It is finite – 21 million is all that can exist. as it’s adopted and as populations increase it becomes scarcer – it’s infinitely divisible (gold copper silver had problems with that, unless like Indonesia you started also minting aluminium coins)
        and yes sure, we’re not there yet – ‘mining’ the final ones of the 21,000,000 will be very energy intensive. But hey, Australia’s government only holds 300 million in gold reserves.. when I last calculated that means there’s only 18 grams per person .. that is NOT a lot of wealth backing our country! If we had to mine our way out of debt you could be sure a massive amount of energy would be put ti use extracting as many ounces as we could.
        But assume bitcoin takes off , the banks don’t get to invent new ones into existence to dilute the stuff, so wide adoption would mean prices would drop, wages would drop, as whole bitcoin values go higher and higher all the time. And yes sure, the folk who got in first *and who sat on it* would have the bulk of the wealth.. for a time, but that’s no more a ponzi scheme than buying land and developing it is. Or buying a car and then 50 years on discovering it has become rare. Let me put it this way.. if I had 100 pounds in shilling 1945 coins pre-decimal and I didn’t hand them over when we decimalized, I theoretically would have been $200 worse off then. If I now converted those sterling silver coins to current-period value money I’d have over $7000 as a result. Ponzi scheme? no, I would have just been gambling my silver preserved my wealth better than bits of paper. My loss then, my gain now.
        As to bitcoin’s long term value? well share market speculation is driving ‘values’ around like a drunk pig at the moment, much as it does precious metals. I mean come on.. silver has been in such short supply of late that there were month-long waiting lists to buy 1kg bars from our local mint.. industry demands masses of the stuff for electronics and barely any is ever recovered. And yet the price was still a mere $20 an ounce? no- once again fake ‘silver’ in the form of shares was manipulating it’s real value down (Memoirs of Popular Delusions discusses banks roles in crashing economies by flooding them with fake value paper while quietly shipping all the silver out of the country).
        Me? I bought one physical bitcoin for a whole $18 many years back. It was all I was prepared to gamble. and being the believer that one should own one’s own wealth I selected to have a physical one I could stuff under a mattress or bury or carry – anything other than letting a bloody bank hold it !

    • It’s going to take some form in the near future though. Blockchain is the base technology that you’re going to see in everything in the next ten years. It’s like a ‘trust’ chain of encrypted ledger transactions that follows something of digital value around. If they used it in Chile they could get rid of all the fat cat corrupt notaries in the country. I’m sure these types of industries will see it as a threat to business as usual.

      • Complete nonsense. Read “Attack of the 50 foot Blockchain” by David Gerard.
        IRL Blockchains are useless, inefficient, risky and fall into the category of a solution seeking a problem.
        In 10 years I predict that there will be NO use examples of Blockchain for anything of value or importance. you may see them in trivial stuff like computer games to keep track of scores or something like that where it does not really matter when it all gets hacked.

  2. By the same token, internet porn and regular spam also need a carbon tax.
    Good luck with both of them, Congressman.

    • Now I seriously doubt that the electrical energy expended on the “mining of bitcons” comes anywhere close to the horrendous amount of electrical energy expended on the per se “mining of social media” via tens-of-millions of PCs interacting with the data storage facilities of Facebook and YouTube.

  3. 1) You want to tax bitcoins? You’ll have more success with an import duty on cocaine and heroin.
    2) All taxes have already been included in the power bill
    3) If bitcoin miners offshore their energy use to places with more affordable power, all the better for them
    4) If the US wants to levy a tariff on information, then the rest of the world will return the favour. Hollywood will be the first to suffer.

    • Yes, I have a hard time understanding why bitcoins would have to pay another tax beyond the carbon taxes that utilities already have to pay. Bitcoin servers are just another customer, right?

      • yes. we buy our electricity and pay our taxes
        However, There are some places that invite us in because they have electricty to sell and no buyers.
        Even a few in CA. Imagine build a 2.4 GW hydro project and having only a few customers consuming
        a couple of MW.

    • Trivial to tax bitcoin use, you just have to trace the users. It is typically not anonymous in normal use. There are already companies specifically tracing bitcoin users. Taxation is ongoing. It’s going to get very painful for some people who thought they could get away with tax evasion, Some will be going to jail.

  4. “You could have environmental regulations of what could be used or a tax on the use of the mines that are going into the bitcoin, so that if they have externalities that they’re causing the environment, that they have to pay a tax on that,” he said.
    Innumerate, illiterate, and inarticulate….all the ingrediants for a California politician…

  5. Does anyone know whether this high energy use by Bitcoin is real and how it compares to say, how much energy on-line video games use?

    • Steve, from what I read, there are quite a few bit coin miners trying to survive Venezuela’s hyper-inflation, and the government is trying to catch them by noting their high power usage. I haven’t seen specific figures, though

      • Wrong
        The government is now allowing people to Mine.
        venez has one of the lowest costs to produce a bitcoin. around $600 to manufacture one
        market value is currently 11K

      • “I don´t understand why Bitcoins have to be mined.”
        Miners create a ledger of transactions: A sends money to B, C send to D, X sends to F etc
        To keep them from cheating ( being a bad accountant) the system requires them to do work.
        They have to have skin in the game. Pay to play.
        That work is solving a puzzle by brute force guessing.
        The first miner to solve the puzzle publishes his block or ledger.
        The nodes check the block. If the block is valid, then all miners start working
        on the next block. Every 10 minutes a block is published.
        When you Mine a block ( build a ledger and solve the puzzle) you are allowed
        to put one special transaction into the ledger:
        This transaction transfers 12.5 BTC to yourself.
        In 2020 this reward will halve to 6.25 BTC.
        The halving continues until 2140 when all 21 Million bitcoin will be distributed.
        Then Miners will live off transaction fees

      • Steve Mosher, Feb 17 @ 9:13
        Not sure what you’re saying is wrong:
        From news.com.com.au, Dec 15, 2017:
        Authorities have largely permitted trading of bitcoin in Venezuela, though they have heavily fined and detained people who use computers to earn bitcoins by auditing online cryptocurrency transactions. Such “mining” operations use immense amounts of electricity, which is heavily subsidised in Venezuela — meaning the state essentially winds up paying for the process.
        (I did not put a direct link above because Firefox advises me that the site is insecure.)

    • By design the cost of mining must increase as the benefit of mining increases as the price of the proof-of-work crypto-currency increases.
      By design the earnings are mostly spent doing by definition useless expensive hash computations.
      The whole of point of POW is to be costly; it requires:
      – specially optimized hardware for fast hash operations
      – energy to run it
      I think Bill Gates proposed requiring POW in emails to combat spam.

  6. For example:
    “This is the methodology the Digiconomist website uses to estimate the Bitcoin network’s energy consumption. It assumes that the industry will spend 60 percent of its revenue on electricity and then extrapolates from the current bitcoin price and prevailing electricity prices. It finds that the network is consuming energy at an annual rate of 32TWh.”
    From assumption to extrapolation.
    https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/

    • Digieconomist is wrong. Mark bevand and I have been tryin to correct his gross errors.
      The cost to operate is NOT A FUNCTION of the revenue, and it is nowhere near 60%
      http://blog.zorinaq.com/serious-faults-in-beci/
      https://digiconomist.net/re-serious-faults-in-beci
      basically.. starting with the Hash rate, which is open for everyone to see and which is central to the issuance of coins, we can work backwards to the number of machines.
      There are basically 3 machines on the market. The machines each have a diferent power efficiency
      ( watts per terahash, or joules per gigahash whichever you like to work with)
      Since I know how many of the machines we shipped ( and have a pretty good idea of my competitors
      market share) we can estimate the energy consumed with some uncertainty.
      Once you have the hashrate and the average power efficiency its easy to calculate the electricty used.
      Some uncertainties remain ( around PUE– people in hot regions use some electricty to cool)
      Going forward Miners will get faster and faster and more power efficient. By 2020 we will be at 5nm

    • 32 TWh? 32 billions kWh. Bulk price of electricity is like 3 cents/kWh, so we are talking of 32 billion x 3 cents. 1 billion dollar; you may double or triple that sum, taking into account tax etc.
      At this magnitude Bitcoins is supposed to replace Western Union, PayPal, and all alike services.
      Western Union: ~5 billions a year.
      Paypal: ~10 billions
      Nothing to fuss about

  7. But electricity is already taxed, and how would they distinguish electrons used for Bitcoin mining from those used to light ones house?
    Perhaps hey should consider taxing the power used to grow pot at home.

      • Nitpick2. Photons are not real particles, they are an invention of the human mind in order to explain certain observations in experimental results which seemed to be lumpy and therefore contradict the view that electromagnetic radiations are analogue.
        Electrons are a real elementary particle.
        Photons are NOT.

      • @ The Reverend Badger
        Actually we are not that sure about electron, either. The “Standard Model” of particle physics works, but it is called “model” for a reason. Electron just have the same status as photon in it.
        Remember that the electron is just another quantum mechanics thing, supposed to be everywhere in the whole universe at the same time (at very low probability, true, but anyway…), and that can be used to “see”things just as if it were a photon (electronic microscope).

  8. Currently, I tend to believe that Bitcoin specifically is the creation of multiple intelligence agencies designed to track illicit money laundering and nefarious activities by certain groups, including rouge states. You believe this was created by a few individuals with Japanese sounding names and remain anomalous, then I think there is a lot of naivety going on.
    All a carbon tax on Bitcoin mining would do is is tax a small part of the creation of new bitcoin and that will be rapidly declining because a good chunk of the 21 million Bitcoin that can be created out of thin air, already has been created and sold to new suckers. Now the poor suckers who traded in legit fiat currency of some type for vapour Krypto are going to be left holding the bag. This is musical chairs on steroids. As most things, the people who got in early and got out a month ago will have a large profit but now multiple layers of Govt’s will be hunting them down, not only to tax their capital gains, but to see who and what they were buying or exchanging goods and services with. This will end very badly for many of these people. All krypto currencies are going to be the target of Policia all over the planet, so I am not touching it with a 10 foot pole. Whoever thinks Krypto is going to be some new sort of secret global currency is totally deluded, because it cuts the local and National Govt’s out of the loop on everything, including taxation. Plus, you think the big banks are going to roll over and give up their semi monopoly on the exchange of wealth between willing parties? And Govt’s will just turn a blind eye to all of this and don’t understand what is going on? If you believe Krypto is the future, I think you are in for a very rude awakening.
    The only good thing to come out of Krypto is Block Chain. If that can be implemented successfully into more traditional economic models such as legitimate trade and commerce, then perhaps we can rid ourselves of some of the evils and people who plague the planet. And that will be abused too at some point, against us, the legitimate law abiding tax paying citizen. If you want to preserve your Wealth, then Gold and precious ‘things’ are your only hope. As it has been the last 5000 years. At the end of the day, there really isn’t a lot of ‘new’ under the Sun, especially when it comes to money and wealth. Except knowledge…

    • What I would add to your last few lines is that eventually pot will be legalized. It is only a matter of time so getting in on the ground floor of some very inexpensive companies may be something to look into. But be cautious and research those companies as you would any other investment.

    • Well there’s no indication that it’s different from how it appears. It seems to me to be a pyramid scheme, but the top of the pyramid is well known.
      You have more confidence in the abilities of government investigators than I do but, who knows?
      Saw that Kodak has started a block chain program to protect photographers images, which seems a good use.

    • YESSSSSSSSSSSSS !!!! Another guy who can see it, well done.
      SA…….
      TO…….
      SHI…….
      Complete the names of well known electronic companies.

  9. “The Democrats belief system: If it moves, tax it. If it continues to move, regulate it. If it stops moving, subsidize it.”” – Ronald Reagan

  10. Ironically, there is a “Climate Coin” that promotes itself as the “first carbon zero cryptocurrency in the world” using block-chain. From the white paper it appears your ‘tokens’ do not have any intrinsic value, no where do they mention how ‘tokens’ could be converted back into cash. Looks like a money grab in the name of CO2.
    Here is the white paper link (pdf) but careful snooping around the main website as they want to install ‘cookies’.
    https://climatecoin.io/uploads/CLIMATECOIN-WHITEPAPER-1.pdf

  11. Sorry, the logic behind taxing something because it uses “a lot of energy” escapes me. Why pick on bitcoin specifically? Maybe there should be a tax on stupidity.

    • “Maybe there should be a tax on stupidity.”
      If you could monetize that, California itself could wipe out the Federal deficit instantly- and probably put a big dent in World-Wide future obligations as well.

    • “Maybe there should be a tax on stupidity.””
      Here’s a very old joke (XVII century, maybe even before)
      The chancellor looks for money (as always), a man proposes:: “sir, let’s tax intelligence; people will self declare intelligent, and be willing to pay to show off”.
      Chancellor replies: “I call you exempt”

  12. “Congressman Ro Khanna seems to have an unusual mix of qualities for a Democrat.”
    Uh, no. He’s a socialist, which is the base of the Democratic party today.

  13. Fortune favors the bold.
    But if it catches on amongst democrat lawmakers, perhaps this is the shove that separates Silicon Valley from the Algoreans.

  14. I still don’t “get” bitcoin. It reminds me of the pyramid parties that use to pop up in the 70’s where once all the attendees were fleeced it was announced the police were mysteriously ‘on the way’ and the last ones into the scam were left out in the cold as everyone quickly departed.

    • The work that they perform to mine, the security and most importantly, the anonymity is the value. It’s a commodity outside government control.

      • BTC isn’t “electronic cash”: you can’t keep your wallet hidden.
        It’s like banking without a designated actor being the bank.
        It’s pseudonymous, everything is exposed for the world to see, except real identities of actors, who can be revealed by trading BTC and real world goods (if you pay a pizza in BTC and give your address, if you buy BTC with EUR, etc.).

      • Not anonymous. (many bitcoin users doing illegal things already traced, some in jail)
        Security a fallacy. (many hacks, lost coins, stolen coins, people have even killed themselves over it)
        Not out side government control (trivial for government to ban e.g. existing financial institutions from dealing with cryptocurrency exchanges or to require citizens to pay taxes on bitcoin /crypto holdings)
        Grant is just spewing out the standard phrases the bitcoin shills throw about like confetti. No substance to them at all.

      • “Security” here is a property of the blockchain. Not your particular computer.
        This is one of the biggest worry to me. Computer security and getting stuff right is so difficult. The Pentagon, CIA and NSA do not get it right (I won’t even mention the joke the FBI became).

  15. As others say above; He’s a Democrat.
    “Tax it”. Is their mantra.
    As a now professional Parasite, he wants his cut.
    Theft by force is the best course.
    Just ask anyone of our “progressive comrades”.

  16. Tax while the goose is still golden. Hurry – we’re approaching a tipping point.
    IMO the bitminers’ hardware will be turned to data harvesting when bitcoins are not worth the media they’re written on. And it will be ferocious.

  17. Eric you are skimming along the surface lazily. Its not the environment they are worried about – that’s the diversionary bait like putting a cow in paranha infested waters so they can sneak across in noticed upstream. It is about control. Bitcoin threatens the marxbrothers big plans. You don’t get that University for All is the indoctrination plan – they are not teaching anything. It is social engineering classes to make people more governable – get everyone in to make everyone stupid.. Khanna is “boldly” supporting the agenda.

  18. They are mentally deficient . I suggest 6 months in an institution with regulaTed meals, volume and exercise. No contact with media of any sort . Family visits once a day for one hour. Remedial work involving growing food would be helpful.

  19. Common mods. It’s the only post thus far that corrects Eric’s unusually lazy analysis.
    Gary, I can assure you that I am not “common”! Mod

  20. There are two separate issues here.
    1. Taxation of bitcoin mining
    It is inherently impossible to have any specific tax on it. One can tax hardware and electricity to do it, but in this case mining would simply move to places, where taxes, consequently prices are the lowest. To set a uniform tax on such things a one world government is needed, which does not exist and hopefully never will. On top of that, even if it were possible, price of all computation would skyrocket, with intolerable side effects on the entire economy.
    2. Sensibility of bitcoins
    Energy efficiency of current computing is poor, deleting bits requires a million times more energy, than Landauer’s limit. Therefore there is ample room for improving technology, which can make cryptocurrency mining orders of magnitude cheaper.
    On top of that, although no algorithm is known as of today to make mining easy, it is not proven either it can’t be done some time in the future. With quantum computers, perhaps.
    All this depends on how bitcoin developers will be able to improve the protocol to fight off coming technological challenges. Which is not known.

    • Bitcoin mining is easy to trace, once authorities have located the physical apparatus they will in most cases know who is going to pay the tax bill. If no one identifies themselves quickly you can confiscate the apparatus. Taxing bitcoin mining is one of the easiest things a government could do if it wants to. you cannot mine bitcoin secretly. You have to be connected to the network, the data is visible to TLAs.

    • One of the reason I LOVE WUWT. You find posts like this one with real information, you’ll find nowhere else.
      That said, as someone pointed out, the whole purpose of a “proof of work” is to require … work. Any breakthrough making it easier will just require a switch to something harder.

  21. They miss the point, as per usual. The whole idea of bitcoins is that it is an anonymous currency. So they won’t know who to tax.

    • bitcoin is not anonymous. Every transaction is detailed and stored in the blockchain for ever. There have
      been several papers showing how you can track users and work out who they are.
      If you want anonymity use cash. Bitcoin is not cash and while people have developed digital cash no
      protocol has ever taken off.

    • The ways they tax:
      1. When we export to certain countries there are of course customs and duties. Individiual
      types of equipment can be taxed.
      2. If the electricity is state controlled, they can charge you more for certain uses ( like in China now)
      Of course, the miners move to places where it is cheapest to mine:
      Today there are many countries where the cost to mine a bitcoin is less than 2K, while the price
      is 11K.
      Further as you make it more expensive to mine, miners will leave the market, that in turn makes it
      easier and cheaper to mine. Every two weeks we adjust for the number of people mining.
      Honey Badger doesnt care about taxes.

  22. Well my dear, not a lot of bit coining mining in CA at 25 cents an KW hour, or anywhere in the United States for that matter. So impose another tax and people will do it in Canada or China.
    The economic ignorance is astounding.

  23. Once the CO2-Global Warming Theory began to gain widespread acceptance, the floodgates were opened to large-scale insanity and to insanity there are no bounds. Insanity can soon become infinite. Bitcoin and the taxing of Bitcoin are the latest examples of the insanity’s reach.

  24. Most suggestions like this come from Progressives, very few of which are in the (R) party. Bitcoin appeals to people in part because it is (mostly) anonymous, and thus difficult to tax. Should the government attempt to levy a carbon tax on the miners, they will just flee to servers where there is no tax.
    The very fact that miners could flee to other jurisdictions is the central point of The Center for Freedom and Prosperity’s argument that “tax competition” between countries is essential to keep taxes low. When people are not free to invest and to save where they see fit, then governments will tend to levy taxes without limit simply because their citizens are economic and regulatory captives.
    The US, Congress has attempted to limit the financial freedom of US Persons by requiring them to file an annual report of their non-US financial account (the “FBAR”) Report of Foreign Bank and Financial Accounts with a mandatory fine of $10,000 for failure to file. They also have the Foreign Account Tax Compliance Act (FATCA) which places onerous reporting requirements of non-US financial institutions that have accounts of US Persons.
    While Bitcoin and other cryptocurrencies currently circumvent these two laws be assured that there are people working day and night to figure out a way to bring them under government reporting and thus taxation. Government hates liberty because it allows people to do things they don’t pay taxes on. Only some people also use their liberty to do things that are harmful to others as well.
    BTW, I hold zero Bitcoins and zero crytocurrency of any sort. Not a single one of them has any direct intrinsic value. Unless and until people can issue credit contracts in them or denominate tangible assets in them, there is nothing that moderates their value over time.

  25. This is so hilariously ridiculous.
    The most high tech, the most clever, the most high IQ, genius guys in USA, and most probably in the world, are showing, that they have fallen and being snared, trapped, in the most simple Trojan Horse trick…so stupidly Hilarious!
    According to the position of these highly clever and wealthy guys, what proposed as per this blog post, in the way it stands, actually, it stands as with a very high chance of success, as per their counting…and their assumed position, as far as this concerned…in accordance with their understanding, their intellect and their expectations…due to their very desperate position.
    It really does mean, at a point, as very “”well” thought, hipper clever “Trojan Horse” appliance, in the context of the modernity of it all at this stage, as far as these guys concerned, but, not quite the same as per Homer’s time and his accounting…3K years ago.
    But for the very benefit and the requirement, of a fair play, and sincerity, at this stage, these guys have to be told and made to realize and contemplate, what actually did trigger this “brilliant” stupid idea in their inflated sculls…!?
    The amassing thing from my point of view, is that these guys, against any odds, are actually triggered to somehow, resolve in a “Trojan Horse” method against the very tight and strict siege against their “Citadel”.
    These guys are actually, desperately trying a “Trojan Horse” against a siege, a tight strong siege…really ridiculous…especially when not addressed properly… In the main context:
    “What actually, and how this silliness triggered, in the first place!”
    Really blind.
    Where is Mosh when needed! 🙂
    I am sure that this makes not much sense, as put, to the many here, but is not that much restricting for me, to freely trying and speak my mind , as far as this concerning…
    Apologies, if being confusing.
    But still what proposed, is still a very very dirty play, and a very devious attempt…considered as highly successful if it triggered and amended… by the clever and highly “successful” silicon guys.
    At some point, from my position, as I think I do understand it, it , does consist as a plain clear indisputable act of treason…
    as per the clarity of the the intent on causing high damages with a clear intent and wishful thinking, where at a given point the clause of treason goes further than in a national context and expands to a civic context… !
    Far much worse…than even the most fake news.
    But in the end, we all fall or rise by the means of our own “swords”…and some swords happen to be sharper.
    Sorry again! Maybe over doing it.
    But as far as I can tell, these highly valued and “worshiped “model” guys are showing clearly their full colors of their treason.
    cheers

  26. The origins of Bitcoin are the mysterious Satoshi Nakamoto because the whole thing was invented by the NSA and launched into the world with help from GCHQ in the UK. It has multiple purposes for the powers that be. Firstly it enables tracking of much criminal activity, secondly it enables the extraction of very large sums of money for any black ops type project. There are 3rd & 4th uses too but I’m not mentioning them here.
    During the time bitcoin has been in existence well over $4.5 Billion has been lost by ordinary investors. There are virtually no arrests and virtually no money has been returned to the original owners. It has all “disappeared”. The vast majority has NOT gone to criminals for buying real estate on tropical islands and Lambos.
    The cryptography of Bitcoin uses a hashing algorithm which is NOT on the approved list from the NIST. It uses secp256k. Not approved because it has a fundamental weakness of a backdoor. At any time it is possible for the authorities to activate this and completely destroy it should they need to.
    None of the above is a “conspiracy theory”. All of it is obtainable via research if you put in the time and effort as I have been doing since 2012.
    Electricity consumption is irrelevant in the context of the wider issues.

    • The Reverend Badger
      February 17, 2018 at 3:55 pm
      ————
      Reverend,
      I am not trying a argue with your position, and I am not trying a start a “fight” over this.
      But in the same time I think that it may help if you at least start considering that actually neither Bitcoin or Blockchain are actually controllable, but in contrary, are very much free of such considered assumptions of control…regardless even when silicon “magicians” do think that there is a way to actually control and bend to their wish and in accordance with their will the Blockchain and the Bitcoin platform…
      cheers

      • I suspect you have not really looked into this is enough detail. Crytpocurrencies , of which there are well over 2000 now, use “Blockchains”. You can use a blockchain for other things though I would argue that in 99.99% of cases this is likely to be inefficient and risky compared to various existing database applications.
        Taking therefore the point about Blockchains we can see that it would be trivial for any government to, for example, ban the use of blockchains in business/industry/commerce. They regulate databases quite heavily now and the GDPR is coming in a matter of weeks. They can simply legislate the use of blockchains in business out of existence. Trivially.
        Moving on to the the specific use case of a blockchain in a cryptocurrency / token, of which Bitcoin is but one of over 2,000 we would have to examine what mechanisms there are for governments to legislate against this. Clearly the on/off ramps of exchanges can be highly regulated. Existing fiat financial organizations can be banned from fiat transactions with cryptocurrency exchanges. Again trivial if they want to do it. You could also require citizens to declare all cryptocurrency transactions on their tax returns and tax them heavily if so desired. Cryptocurrency mining could be declared illegal.
        Thus I refute your assertion, it is relatively easy for governments to regulate/control/ban any specific cryptos, any specific blockchain use or indeed all of them if they want to.
        You may of course argue that if all the countries in the world except one ban Bitcoin you have proved your point. To which I say enjoy your holiday in Liberland!

      • The Reverend Badger
        February 18, 2018 at 6:42 am
        Thanks for your time and your response.
        So as to be clear, I am not arguing with your points made, only trying a clarification.
        What you say is a small print, small detail description about blockchain and Bitcoin… like a superficial description…describing the shell.
        You actually looking at the “skin” of the blockchain and Bitcoin, while I was talking of the below the skin of it…the core.
        Meaning there is, as far as I can tell, far much more than the eye can catch….and I have no doubt that it can not be controlled or manipulated.
        I think no government ever will try to, as already it has become clear that Internet can not be controlled.
        Is not the “skin’ that did respond and hushed hushed trillions of mint in to oblivion, with no much stretch or struggle, very quickly and without harming the bitcoin miners at all…
        Who actually profited from that Bitcoin bubble burst do you think?
        Who actually profited by the hush hush and the burning of that trillion size financial monetary ghost monster!
        Not sure that this being clear enough, just trying. 🙂
        cheers

      • Badger
        “I suspect you have not really looked into this is enough detail. Crytpocurrencies , of which there are well over 2000 now, use “Blockchains”. You can use a blockchain for other things though I would argue that in 99.99% of cases this is likely to be inefficient and risky compared to various existing database applications.
        Taking therefore the point about Blockchains we can see that it would be trivial for any government to, for example, ban the use of blockchains in business/industry/commerce. They regulate databases quite heavily now and the GDPR is coming in a matter of weeks. They can simply legislate the use of blockchains in business out of existence. Trivially.”
        Not so trivial. Blockchains, and here you are quite wrong, is just one of the datastructures used by cryptoassets. DAGs is another. What you trying to argue is that the government would be able to regulate
        how records in a database are written. To do this you would have to make GUIDs illegal, any and all hash
        functions illegal. a blockchain is nothing more than a data structure in which sequential records are written
        with data that preserves the order of writing. Those blockchains can be private or public. And what forms of tying records together do you outlaw? SHA-256 hashes? any method whatsover of determining which
        records are written when? Basically any regulation you write is just a recipe for what to avoid when designing your linked data. In short all a block chain does is link data. Same with a DAG. see IOTA or Hashgraph for “non blockchain” datastructures. Now of course you can regulate the content, like make it illedgal for a business to store certain personal information and you could regulate that all information only be on paper. Getting the world to agree on that would be hard.
        “Moving on to the the specific use case of a blockchain in a cryptocurrency / token, of which Bitcoin is but one of over 2,000 we would have to examine what mechanisms there are for governments to legislate against this. Clearly the on/off ramps of exchanges can be highly regulated. Existing fiat financial organizations can be banned from fiat transactions with cryptocurrency exchanges. Again trivial if they want to do it. You could also require citizens to declare all cryptocurrency transactions on their tax returns and tax them heavily if so desired. Cryptocurrency mining could be declared illegal.
        Thus I refute your assertion, it is relatively easy for governments to regulate/control/ban any specific cryptos, any specific blockchain use or indeed all of them if they want to.”
        Exchanges are a point of control where you can control the ability of New particpants to enter the system
        and old participants to exit the system. Places that use this method see a surge in offline methods.
        In China, people just revert to the script system. basically in person transfers. You give me Yuan, I transfer
        coins to you. The online version of this is Local bitcoins. Basically, there are trusted traders; you send them
        a wire, they give you coins. So yes the government can regulate exchanges, and they drive the trade underground, and to less safe methods of entry and exit. You basically create arbitrage opportunites, like the kind of situation you saw in India and Korea, where the banking restrictions, create a premium.
        Thanks! As for declaring your assets. Yes you could require this, the problem is enforcement.
        The really hard thing to do is to make mining illegal. Yes, you make industrial scale mining illegal. In china they are starting the process of controlling the mining. Folks just dissamble and ship to friendly regions.
        clamp down more and over time the mining becomes harder to trace and controll. Its just data sent over the internet. We manage to get that data through the great fire wall at astounding speeds. Honey badger dont care. crack down on large asic farms and you end up with smaller farms, crack down on more small farms and you get more individual miners, like in the begining. outlaw asics? GPUS? CPUs? the system responds by making mining easier.
        basically you cant make bitcoin illegal. You can make traceable exchanging difficult or regulated or illegal
        but it would be hard to outlaw in person transfers. You give me dollars, I tell you 12 words. done.
        or I give you physical BTC. You can make massive farming expensive and difficult.. and the response will be to diversify mining. It is merely guessing at a number.
        Bottom line you cant uninvent something

  27. Climate models outputs are a form of cryptocurrency if you think about it.
    And both completely worthless in the real physical world.

  28. “The mind boggling energy burn required to verify each bitcoin payment”
    Very wong. Verifying the asymmetric cryptography is easy.
    Producing a proof of work must be costly, by definition. The cost by design grows as more people get in the game.
    That cost is not related to the number of transactions that are verified.

  29. I suspect the congressman is just acting on political instinct.
    Bitcoin is something that’s in the news a lot. He doesn’t really understand it, but thinks it might be important. The politician’s instinct to meddle, coupled with the need to appear ‘with-it’ and relevant, requires that he somehow put his finger in this pie. Taxation and regulation are pretty much the only real tools that such a politician has at his disposal. (They may fulfill some other functions but I can’t think of them at the moment.)

  30. “The mind boggling energy burn required to verify each bitcoin payment or currency transfer is finally attracting the attention of Democrat Party climate advocates.”
    Huh?
    Miners create blocks. Blocks are ledgers of transactions.
    A Miner creates a block of transactions and IF he wins the race to find the secret number
    Then he will publish his block to the network.
    Next, the nodes ( there are about 10K nodes) verify the block. They check his work.
    If his block is valid, then he will be able to collecct a reward for his work ( 12.5 BTC)
    plus transaction fees.
    The energy nodes use to verify blocks is tiny.
    The energy Miners use is large. This provides security for the block chain. The only way to cheat
    is to rewrite the past ledger. And the enerrgy required to do that makes it impossible.
    The energy is used for SECURITY

      • Not to mention worthless…when national Governments around the world declare it to be illegal to use to avoid taxation and/or anonymously to trade in illegal criminal enterprise.

      • Obviously, that one of the intended uses of Bitcoin is to avoid legitimate taxation and/or avoidance, in addition to being able to engage in nefarious illegal activity. Not to mention many layers of anonymity. This Bitcoin Krypto so called ‘currency’ represents one of the biggest threats to the established status quo of the financial transaction. (Excluding Blockchain) A real Wild West with not many rules of any kind other than the transaction gets processed accurately, in most cases. And not that the status quo is a shining beacon on a hill, but it is the summation of our economic progress to date over several centuries now.
        Mining Bitcoin, whatever that even means, definitely doesn’t represent any real actual value of some real work or value that was created because of ‘solving a puzzle’. The Blockchain makes perfect sense, but that in itself isn’t worth tens of billions of dollars as Bitcoin because it is attached to such, because some computers are certifying transactions and being rewarded a bitcoin prize for doing so. I think most folks here see the fraud in all this, and it ends very badly for those who invest hard earnt fiat currency for bogus bitcoin. But it also should end badly for those who peddle this nonsense because it is a Ponzi Scheme on steroids, and one that makes no economic sense, other than maybe incorporating the Blockchain technology into our current financial system to keep everyone honest. Bitcoin and Blockchain are two different animals, and Bitcoin is a type of intellectual theft, pulling the wool over on many sheep who buy late into this Pyrmid scheme, or who buy equipment to mine such and waste precious resources and energy doing so. Bitcoin and Crypto Currencies will be shut down sooner than later, because it cannot defeat our present status quo of exchanging wealth for goods and services as we presently do. Mark my words.

      • weird
        Western Union has 500,000 offices world wide that are required for transfering money from individual
        to individual. 500000.
        Do you call that a waste of concrete, glass, desks, and computers, and electricity?
        Nope.
        Bitcoin allows me to send money to anyone who has a wallet ( you can get one for free)
        The remmitance market is 500Billion. Western Union is just a small part of that.
        and bitcoin allows us to do this function at a much lower cost. and that’s just one function we can do
        for less.
        Of course the funds need to be secured. the funds in your bank are secured against theft by bank security.
        you dont call that a waste.
        You are protected from fraud by the bank by your government. You dont call that a waste.
        You are not protected from theft by your government in the form of inflation. Put money
        in Fiat with a 2% inflation rate. how much real value is left after 10 years?
        at the bottom Bitcoin is a bet that self banking people can do a better job than state actors.
        dont invest more than you can afford to lose.

      • “Not to mention worthless…when national Governments around the world declare it to be illegal to use to avoid taxation and/or anonymously to trade in illegal criminal enterprise.”
        I always laugh at this. you cant make it illegal. how exactly?
        its just numbers.
        All my bitcoin are distributed on thousands of computers, some known others unknown.
        They are controlled by 12 words.

      • I am glad you bring up Western Union Steve. When I send monies to any international destination and I am not in my home country, I need to show and they record my passport. Even if I send monies within the same foreign country as the Brick and Mortar Western Union, I still have to show ID, and of course the receiver of the monies has to obviously show ID or have it go into an account that is recorderd. And it goes without saying that when I use WU from my bank account, there is a paper trail of who and how much I sent.
        While we would like to get the middle man out of the equation taking a hefty % of the transaction, if it is not transparent then ultimately the process will be blocked by Govt’s world wide, because this will not be allowed to stand for the obvious reasons of terroristic planning and illicit use of monies for multiple types of criminal activity hiding behind anonymity.
        Use your skills Steve to legitimize BlockChain into mainstream financial markets, and you will have an enduring product that will add to a better world. Bitcoin doesn’t do that, for all the reasons that most people have stated here already.

    • Gotta admire that Mr. Mosher; going from paid climate alarmist to paid hustler of Bitcoin hardware. I assume his Wandering in that Bitcoin Weed Patch pays more.
      All get rich quick schemes end badly for the suckers. Its “so sciency” has replaced “follow the pea” for the gullible.
      Who are these “nodes” (10K?) that “verify” the blocks? Who gets the “transaction fees?”
      Ultimately, who will accept Bitcoins in payment where their accountants can’t track such transactions? Money laundering? Criminal activities? Tax evaders? Get real, fools.

    • Steven Mosher
      February 17, 2018 at 9:48 pm
      hope you read this.
      Generally, as per the way I do understand this issue, I do agree with you and your position and your points in this one issue.
      But considering that you are very much involved with the Bitcoin mining and miners, in the context of this new green tax involving miners, do you think that if this implemented as it suppose to, in a global manner, when China too has to be in the bag, do you think bitcoin mining and miners will be so well sheltered and secured as they were this time around burst, if Blockchain – Bitcoin platform has to respond and bubble burst again as per a default reset of it’s value?
      Do you think Bitcoin mining and miners will get a free secure safe pass when it directly implicated in a scheme that Blockchain-Bitcoin will have to respond and default it as unsafe and infringing with the Blockchain-bitcoin principle of stability?
      Do you think that this miners should not worry much when an artificial global increase on spending-investing with bitcoin mining implemented?
      Maybe my point not that valid, and the questions not much important, but just for what it could be worth.
      Addressing you in this one as you seem to have considerable interest invested in Bitcoin mining… 🙂
      thanks.

      • But considering that you are very much involved with the Bitcoin mining and miners, in the context of this new green tax involving miners, do you think that if this implemented as it suppose to, in a global manner, when China too has to be in the bag, do you think bitcoin mining and miners will be so well sheltered and secured as they were this time around burst, if Blockchain – Bitcoin platform has to respond and bubble burst again as per a default reset of it’s value?”
        The floor of the price is really a function of HODLers. People who own a majority of the coin and refuse to sell at any price below say 100K. So for example at the recnet bottom one Whale bought up
        400M at around 6-8K. As far as Mining goes, price drops will impact those with high electricty costs
        and new entrants who are illiquid. As you mine you need to be cashing some out to pay your opex
        and prepare for downturns. You could also use futures or any of the crypto lending instruments
        where you use your crypto as collateral for fiat loans. interest rates on these suck however.
        Do you think Bitcoin mining and miners will get a free secure safe pass when it directly implicated in a scheme that Blockchain-Bitcoin will have to respond and default it as unsafe and infringing with the Blockchain-bitcoin principle of stability?
        Huh? there is no principle of stability. The value is determined by the market. period.
        Do you think that this miners should not worry much when an artificial global increase on spending-investing with bitcoin mining implemented?
        The Mining bet is easy to calculate. Those who dont know how to do the calculation and evalute
        the risk, should not be in the business.
        Maybe my point not that valid, and the questions not much important, but just for what it could be worth.
        Addressing you in this one as you seem to have considerable interest invested in Bitcoin mining… 🙂
        Not sure I’ve understood or anaswered your questions. Some of them were loaded questions ( assuming facts not in evidence)

        • Gains on assets are taxed. Woe be upon those running afoul of the mightiest organization in the world, the IRS. They will eventually identify everyone involved in crypto-currencies.
          Remember what happened to those prominent advocates of tax avoidance schemes and those associated with those efforts? Additionally, enabling a criminal activity is a crime.
          The Chinese won’t help you, Mr. Mosher. They value that trade surplus with the U.S.

      • Steven Mosher
        February 18, 2018 at 7:42 pm.
        Mosher, thank you for the reply, appreciated.
        Allow me to show where I think we diverge in this topic.
        you say:
        “The floor of the price is really a function of HODLers. People who own a majority of the coin and refuse to sell at any price below say 100K”.
        then:
        “Huh? there is no principle of stability. The value is determined by the market. period”
        in relation to this two points and in consideration of what also you said:
        “( assuming facts not in evidence)”
        From my point of view , based in what to me seems as assuming facts based in evidence, the bubble burst actually defaulted at 0 value or very nearly at that point for the upper shoulder of the bitcoin price, the very value of exchange financing value.
        All or almost all exchange-financial organized enterprises “swimming” and operating in that “room”, or space, sunk or went bust…
        From my point of view the floor price, the mean value of bitcoin, is maintained and dictated by the
        Blockchain-bitcoin coupling, and as far as I can tell it can not be really changed or manipulated. Energy SECURED. 🙂
        That is the “safe shelter” for the bitcoin mining operation and industry…as per my understanding thus far.
        The cost-profit ratio of mining, is set by the Blockchane-bitcoin coupling platform…
        as far as I can tell is always projected to be stable, steady and fixed, even when the floor price projected in a very very slow decline over time………………….set like “set in stone” 🙂
        The only problem there with it, is, if a needed response to maintain it, will be in the means of temporarily as reducing that ratio in accordance with the artificial forcing that may try to artificially increase it, where “temporarily” consisting with the time length of the artificial forcing persisting.
        Keep as many bitcoins as you can for as long as you want…but there is not even the smallest effect in the bitcoin value to be contemplated, even in the case of you imagining as actually having and holding forever the whole bitcoins out there…still no much there as a means to effect the value of the bitcoin, not even the overall value, let alone the floor one.
        Oh well, then, if it is more or less as you describe it, then whole this thingy happens to be unstable, quite so, and very much prone to manipulation, very much prone to anthropogenic greed forcing.
        But I still fancy to flirt with the idea that greed in Blockchain-bitcoin platform, is like greed meeting Joe Black. 🙂
        Please do not misunderstand me, just trying a clarify my position…
        Yes my questions, could be seem as loaded, and very well may be so.
        I was trying to direct attention to a possible condition, in regard to bitcoin mining, at the possibility that an artificial global increase of the mining cost may lead to a response by the Blockchain, resulting in the drop of the floor price, or the mean value of bitcoin…which in the case of another bubble burst may result to “harm” and collaterally inflict damages and loses to bitcoin miners and the mining “industry” at large….which if that floor price happened to be around at ~8K this time, next time will be at far lower, even at half of that value.
        That was all I was trying a point out and direct the attention to.
        Hope you do not mind my approach and the argument over this…:)
        Thanks again, Appreciated.
        cheers

  31. Steve Mosher likes the word SECURITY.
    Instead of using some 5 lever mortice locks and similar to SECURE my house while I am out I have decided instead to leave all the doors and windows open and secure my property via a continuous stream of petrol powered flamethrowers around the whole perimeter. This consumes 100 gallons per hour and costs me over $4000 per week. This is NOT a waste because the FUEL SECURES the building.

  32. Nick Szabo wrote the specification for Bitcoin.
    He published Bitgold in 1998 and it was released as Bitcoin in 2008.
    He ‘owns’ the ‘ledger’ but has no interest in ‘profiting’ from it.
    Why . . . well he’s smart enough to understand the moment the US Governments can identify an individual or entity that ‘owns’ or ‘controls’ Bitcoin the ‘individual’ will be charged and subsequently jailed for a very long list of AML and TOC offences.
    In particular, Bitcoin has breach laws for not maintaining anti-money-laundering procedures, which include:
    •a customer due diligence programme;
    •designation of an anti-money laundering compliance officer;
    •development of an ongoing training programme for employees;
    •audit procedures to test the effectiveness of the anti-money laundering programme; and
    •suspicious activity reporting requirements.
    Nick is an academic ‘philosopher’, not a businessman.

      • Sorry there’s a primary ledger without which it can’t operate.
        Currently Bitcoin is ‘maintained’ by Wladimir van der Laan.
        Szabo or van der Laan could blow-up Bitcoin tomorrow.
        It’s just a paradigm . . .

      • Warren Blair
        February 18, 2018 at 11:49 pm
        Sorry there’s a primary ledger without which it can’t operate.
        Currently Bitcoin is ‘maintained’ by Wladimir van der Laan.
        Szabo or van der Laan could blow-up Bitcoin tomorrow.
        It’s just a paradigm . . .
        ——————————–
        With all do respect Warren, whatever about who “maintains” Bitcoin, the bitcoins can not be blown-up.
        Even considering that one person purchases the whole bitcoins at a given moment, no way this person can blow-up bitcoins or its value, or even having a chance to manipulate that value, only will happen to be considered as the bigger fool out there, rightfully so.
        To somehow imagine bitcoins blowing-up, you have to imagining the reversal or the blow- up of the Blockchain, something beyond possibility….regardless how long it will take for ppl to realize this.
        Blockchain is set for a long long stay, so long that it will be worthless to even try and estimate it, and no one can do anything about it….better start getting used to this..:)
        Blockchain bitcoins are very tightly connected.
        The bitcoin platform can not even be manipulated let alone considering that it could be blown-of, regardless who maintains the Bitcoin.
        Anthropogenic forcing can not and will not have any effect ever or any blow-of impact in the
        Blockchain-bitcoin coupling…:)
        Oh well, very difficult for me to consider it at this point any other way.
        cheers

  33. Wow Whiten software that can’t be modified!
    You’re clearly pontificating from a platform of complete ignorance.
    Bitcoin ‘engine’ programmers can do whatever they like including writing routines to cause every Bitcoin to eat every other Bitcoin then delete every block in existence.
    Pelople who believe in immutable computing are suckers in the vein of CAWG believers.

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