Topic: Bitcoin/Crypto Carbon Tax? (Read 273 times)
Sweden has already imposed a carbon tax, but miners dont usually do their operations on places that would cost them a lot on bills. That's why almost half of the world’s Bitcoin mining capacity is situated in southwest China, where power is cheap, less taxed and supplied by coal-fired plants as well as hydroelectricity. If multiple countries end up imposing a carbon tax on bitcoin then the number of miners will certainly decrease, but that wont stop them from doing so. Regarding the price, i guess the more scarce it is, the higher the price will be.
Who thinks that multiple countries will end up imposing a carbon tax on crytocurrency owners & miners? If this is done, what would happen to the price of BTC? Do you think bitcoin would make changes to adapt (like ending mining sooner than 2140)? Would Bitcoin be secure with fewer miners?
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
Imposing such taxes would be impractical by the government's because miners are already paying taxes in the form of profits and then you pay for the electricity you are using.The governments can increase the cost of electricity for miners which can reduce profits but still it would not compromise the Bitcoin mining network because btc prices will also be high at that time covering loss of miners.Ukraine has recently started a nuclear plant for Bitcoin mining how much heat and carbon it will ommit think of it? They are also exploiting natural and human resources to mine crypto and Bitcoin so they would not be imposing such taxes in near future. https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
I certainly think the world will take action on the Bitcoin carbon footprint.
This has been put off because of Covid, and many people have been bored at home buying bitcoin during lockdown, even company CEOs
When the lockdowns end and we have the next climate conference https://ukcop26.org/ then the tone will change.
I think the only way for Bitcoin to survive is if the Bitcoin community and especially the whales invest profit in making Bitcoin carbon neutral.
I tend to agree with you, but you never know with politicians. While one French politician is signing a petition to hold BTC, India is talking about banning crytos altogether. This has been put off because of Covid, and many people have been bored at home buying bitcoin during lockdown, even company CEOs
When the lockdowns end and we have the next climate conference https://ukcop26.org/ then the tone will change.
I think the only way for Bitcoin to survive is if the Bitcoin community and especially the whales invest profit in making Bitcoin carbon neutral.
To me, the head scratcher is Musk. I think he could have made even more profit for Tesla by buying and endorsing a smaller, greener cryto than BTC.
There are a lot of companies that are trying to stay politically ahead of and reduce their carbon footprints. I think the bitcoin community would be wise to do the same, but is it the whales or miners who control things?
I certainly think the world will take action on the Bitcoin carbon footprint.
This has been put off because of Covid, and many people have been bored at home buying bitcoin during lockdown, even company CEOs
When the lockdowns end and we have the next climate conference https://ukcop26.org/ then the tone will change.
I think the only way for Bitcoin to survive is if the Bitcoin community and especially the whales invest profit in making Bitcoin carbon neutral.
This has been put off because of Covid, and many people have been bored at home buying bitcoin during lockdown, even company CEOs
When the lockdowns end and we have the next climate conference https://ukcop26.org/ then the tone will change.
I think the only way for Bitcoin to survive is if the Bitcoin community and especially the whales invest profit in making Bitcoin carbon neutral.
Maybe if the country find an increase in the carbon emission from mining of cryptocurrencies, then there is chance of imposing such taxes over the miners. This tax can't be collected from the Bitcoin holders. Mining being the backbone to the cryptocurrency network, when some tax is being collected from the miners, the same gets connected with the increase in the transaction fee. This way such taxes could affect the bitcoin usage.
However it is a difficult task to tax in such a way, because governments won't easily identify the small scale miners and people holding bitcoin.
However it is a difficult task to tax in such a way, because governments won't easily identify the small scale miners and people holding bitcoin.
In the future, electricity consumption will go down drastically as mining equipment manufacturers will be able to manufacture rigs that are more energy efficient.
That is a misconception. In general, the cost of mining approaches the value of the block reward and mining efficiency has no effect on the amount of energy used. In theory, if the efficiency of mining is increased by a factor of 10, then the number of miners will increase by a factor of 10, so the amount of electricity used is unchanged.
History shows this to be true. The efficiency of mining has gone from about 1 MH/J in 2009 to about 30000 MH/J today. Despite that 30000x increase in efficiency, the amount of electricity used has still risen (and by a factor of about 40000x)
Do you guys know how many hectares of forest is cut down every year, to print banknotes?
Cutting down forests is considered carbon neutral if the forests are replanted.
Well, if the mines could lower their carbon footprint, then they can use that to get some benefits like taxes being slashed or other benefits that I couldn't think of for the reason that in my country, there isn't a lot of carbon footprint involved laws imposed although there are a lot of factories in my city.
In the future, electricity consumption will go down drastically as mining equipment manufacturers will be able to manufacture rigs that are more energy efficient. Also, there will be a move towards renewable energy sources such as wind and solar energy. That said, I don't understand why no one is talking about the carbon footprint for fiat currency. Do you guys know how many hectares of forest is cut down every year, to print banknotes?
The question the BTC community should be asking is what is the best way for bitcoin to quickly reduce its green house gas emissions back to its 2015 level?
1. Carbon Tax
2. Code/Protocol Change
3. Price Decrease
4. Something Else
From Wikipedia:
Quote
A carbon tax is a tax levied on the carbon content of goods and services, predominantly in the transport and energy sectors.
Bitcoin does NOT have any carbon content, it does NOT burn any carbon-based fuels, it does NOT emit any kind of pollution at all. Bitcoin is a user of the electricity that is provided by the electric companies. If a miner is supposed to pay carbon tax then you too should also pay it for your fridge, TV,... basically any time you use electricity!Never underestimate what a government will do to raise taxes on its minions.
Who thinks that multiple countries will end up imposing a carbon tax on crytocurrency owners & miners? If this is done, what would happen to the price of BTC? Do you think bitcoin would make changes to adapt (like ending mining sooner than 2140)?
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
After the institutions and some private joined the cryptocurrency investment I have the feeling that sooner or later a lot of countries will impose a tax on cryptocurrency owners and miners but I don't see any reason for the implementation of multiple taxes not to talk about the carbon tax afterall crypto miners use electricity, not gas or fluid that will discharge carbon dioxide.https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
Having said that, our own opinion doesn't count in the government decision but if any case such tax is developed it won't affect the price of Bitcoin but the will be increasing in transaction fees.
Would Bitcoin be secure with fewer miners?
Yes. In fact, we have the LN.
I agree with those who say a carbon tax should, be applied to all activities, not just btc mining. It was pointed out by @aoluain that many European countries already do this. How much btc mining takes place in countries with high carbon taxes like Sweden? My guess is that it's lower than the % of btc owned by residents of these countries.
What if these countries determined that buying/holding btc from foreign minors who use untaxed fossil fuel generated electricity was a loophole (as @odolvlobo alluded to) they wanted to close as these foreign carbon emissions affect their citizens? The US has very complex laws to try to tax foreign profits of their citizens, so why wouldn't environmentally conscious countries also place carbon taxes on their citizens who consume carbon intensive goods manufactured abroad?
What if these countries determined that buying/holding btc from foreign minors who use untaxed fossil fuel generated electricity was a loophole (as @odolvlobo alluded to) they wanted to close as these foreign carbon emissions affect their citizens? The US has very complex laws to try to tax foreign profits of their citizens, so why wouldn't environmentally conscious countries also place carbon taxes on their citizens who consume carbon intensive goods manufactured abroad?
The problem with renewable resources is that most of them are pretty expensive which can take up to years to upset the cost. Just because fiat is the enemy of cryptocurrency doesn't mean that they are not innovating too, I think that there isn't going to be a need to cut trees anymore as time goes on because most fiat are slowly going to the polymer type of currency and most of the current fiat is not purely paper because if that were the case, a one time exposure to water is going to destroy that fiat, they are a mixture of cotton and other things to make it sturdy against elements.
It doesn't matter whether fiat currency is made of paper, polymer or cotton. All of these components are damaging to the nature, and the most important thing to note here is that the fiat banknotes needs to be replaced after a few years of usage. Polymer banknotes may last more compared to those made from paper, but even they have a limited lifespan. The beauty with Bitcoin is that once it is mined, the coins are indestructible.
And I agree with the argument related to renewable sources of energy. As of now, they are more expensive when compared to coal or natural gas generated electricity. But the gap is narrowing very rapidly, and very soon electricity from the renewable sources will be on par with that from non-renewable sources as far as the cost is concerned. In 2018, the average cost of solar generated electricity was estimated at $0.085 per KWh. Not as cheap as coal generated electricity, but not that high either.
Bitcoin does NOT have any carbon content, it does NOT burn any carbon-based fuels, it does NOT emit any kind of pollution at all. Bitcoin is a user of the electricity that is provided by the electric companies. If a miner is supposed to pay carbon tax then you too should also pay it for your fridge, TV,... basically any time you use electricity!
Derived demand from mining does contribute to a larger electrical demand from those sources, for which if you're the government (and it becomes an issue), you would probably implement a tax directly on the miners to avoid the distortion within the energy market caused by it. While it isn't exactly a carbon tax, you're essentially making mining less profitable. I don't find it a huge problem, but it doesn't mean that Bitcoin will not indirectly result in pollution; increase in Bitcoin prices results in more miners and more ASICs -> E-waste and perhaps electrical usage.
In my opinion, this will be absolutely the wrong decision.
Well, if the mines could lower their carbon footprint, then they can use that to get some benefits like taxes being slashed or other benefits that I couldn't think of for the reason that in my country, there isn't a lot of carbon footprint involved laws imposed although there are a lot of factories in my city.
In the future, electricity consumption will go down drastically as mining equipment manufacturers will be able to manufacture rigs that are more energy efficient. Also, there will be a move towards renewable energy sources such as wind and solar energy. That said, I don't understand why no one is talking about the carbon footprint for fiat currency. Do you guys know how many hectares of forest is cut down every year, to print banknotes?
Sooner or later all countries will tax crypto. Because they want piece of the crypto pie too
This is correct. But the correct way to do it is to tax crypto gains, like they tax any other gains, not just simply cypto (which could mean possession).
And I think that most countries already do that, in a better or worse manner.
Sooner or later all countries will tax crypto. Because they want piece of the crypto pie too
Most countries, with the exception if a few already tax crypto profits in the shape
of capital gains tax, treating it like any other investment.
In Europe some of us are already paying Carbon Tax so the more electricity you use
the more you pay https://taxfoundation.org/carbon-taxes-in-europe-2020/
If I buy an Electric Car which uses Electricity from the national grid, the same grid
which burns coal to generate electricity I dont pay any extra Carbon Tax just because
I have an EV, I pay the same rate as boiling a kettle.
The article is just another attack on Bitcoin using electricity again to beat it with.
Sooner or later all countries will tax crypto. Because they want piece of the crypto pie too
Well, if the mines could lower their carbon footprint, then they can use that to get some benefits like taxes being slashed or other benefits that I couldn't think of for the reason that in my country, there isn't a lot of carbon footprint involved laws imposed although there are a lot of factories in my city.
In the future, electricity consumption will go down drastically as mining equipment manufacturers will be able to manufacture rigs that are more energy efficient. Also, there will be a move towards renewable energy sources such as wind and solar energy. That said, I don't understand why no one is talking about the carbon footprint for fiat currency. Do you guys know how many hectares of forest is cut down every year, to print banknotes?
Well, if the mines could lower their carbon footprint, then they can use that to get some benefits like taxes being slashed or other benefits that I couldn't think of for the reason that in my country, there isn't a lot of carbon footprint involved laws imposed although there are a lot of factories in my city.
I assume Bitcoin mining will be less attractive for newcomers and the price will go down.
From Wikipedia:
Quote
A carbon tax is a tax levied on the carbon content of goods and services, predominantly in the transport and energy sectors.
Bitcoin does NOT have any carbon content, it does NOT burn any carbon-based fuels, it does NOT emit any kind of pollution at all. Bitcoin is a user of the electricity that is provided by the electric companies. If a miner is supposed to pay carbon tax then you too should also pay it for your fridge, TV,... basically any time you use electricity!All the Bitcoin haters,who say that BTC mining is polluting the environment should read your post.
BTC mining isn't polluting anything.It just consumes electricity that might be produced by burning coal.
What if BTC miners are consuming electricity produced by Nuclear power plants?Such electricity is considered clean and the nuclear power plants aren't paying carbon tax.
All the anti-Bitcoin mining propaganda is just pure BS.
From Wikipedia:
Quote
A carbon tax is a tax levied on the carbon content of goods and services, predominantly in the transport and energy sectors.
Bitcoin does NOT have any carbon content, it does NOT burn any carbon-based fuels, it does NOT emit any kind of pollution at all. Bitcoin is a user of the electricity that is provided by the electric companies. If a miner is supposed to pay carbon tax then you too should also pay it for your fridge, TV,... basically any time you use electricity!
Placing a carbon tax on Bitcoin mining would not affect Bitcoin in the slightest.
It would simply lower the difficulty. However, an unintended consequence might be the migration of mining to countries that use more fossil fuels for energy generation. It would also create a new class of criminals -- those that don't pay the tax and mine Bitcoin at a huge financial advantage.
More broadly, I believe that these attacks are misdirected. The real issue is not Bitcoin's consumption of energy, but instead it is the generation of energy by burning fossil fuels. If fossil fuels were not used to generate energy, then this discussion would be moot.
If we determine that the merit of Bitcoin is not worthy of the energy that it uses, then should we not also evaluate the merit of other energy-consuming activities? What about watching TikTok videos? Should we ban those? They arguably have little merit, yet so much energy is expended on their distribution and viewing. What else can we prohibit based on its merit vs. energy consumption? What about NASCAR?
It would simply lower the difficulty. However, an unintended consequence might be the migration of mining to countries that use more fossil fuels for energy generation. It would also create a new class of criminals -- those that don't pay the tax and mine Bitcoin at a huge financial advantage.
More broadly, I believe that these attacks are misdirected. The real issue is not Bitcoin's consumption of energy, but instead it is the generation of energy by burning fossil fuels. If fossil fuels were not used to generate energy, then this discussion would be moot.
If we determine that the merit of Bitcoin is not worthy of the energy that it uses, then should we not also evaluate the merit of other energy-consuming activities? What about watching TikTok videos? Should we ban those? They arguably have little merit, yet so much energy is expended on their distribution and viewing. What else can we prohibit based on its merit vs. energy consumption? What about NASCAR?
Mining will never end; 2140 is simply the year for which the block rewards diminishes below 1 satoshi. I highly doubt that it is feasible to try to price the environmental impacts fairly or is it easy to impose the tax on the users themselves. It is perfectly feasible to be implementing it for miners but it would probably only affect the numbers of miners and their profit margin. Whether the price would drop would be an entirely different issues that isn't exactly affected by this; difficulty and the network hashrate could be affected if this ever happens.
Who thinks that multiple countries will end up imposing a carbon tax on crytocurrency owners & miners? If this is done, what would happen to the price of BTC? Do you think bitcoin would make changes to adapt (like ending mining sooner than 2140)? Would Bitcoin be secure with fewer miners?
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
Ridiculous. They can't impose carbon tax specific to a certain subgroup. If they want to impose it, then it will be implemented for everyone who uses electricity from the national grid. As per the latest stats, Bitcoin mining is consuming only 0.6% of the global electricity generation. So what about the 99.4%? Do they think that this group of 99.4% solely uses the electricity for productive purposes?
Who thinks that multiple countries will end up imposing a carbon tax on crytocurrency owners & miners? If this is done, what would happen to the price of BTC? Do you think bitcoin would make changes to adapt (like ending mining sooner than 2140)? Would Bitcoin be secure with fewer miners?
I think that's not surprising if we end up within more and more regulation even with carbon tax on mining btc. I don't think price will just settle much less considering it would be taxed, that's not realistic in its sense if BTC would get more cheaper here, though we may see some declines I think in the long run mining will still be a business.
Good points so far.
While I tend to favor less government intervention rather than more, I do feel one of the roles of government is to help factor in external costs into prices in cases where free market prices do not include these costs. Pollution is often times an external cost that is not included in free market price (and is not limited to BTC, as many have pointed out).
One reason I suggest that governments might place carbon taxes on owners, and not just miners, is they may view this as a way to get around jurisductional reach issues.
While I tend to favor less government intervention rather than more, I do feel one of the roles of government is to help factor in external costs into prices in cases where free market prices do not include these costs. Pollution is often times an external cost that is not included in free market price (and is not limited to BTC, as many have pointed out).
One reason I suggest that governments might place carbon taxes on owners, and not just miners, is they may view this as a way to get around jurisductional reach issues.
Carbon and all other taxes are incredibly dirty business and not Bitcoin like this article suggests, but I would not be surprised if countries invent some new Bitcoin tax, because they are best for creating new taxes.
What if country like France is using nuclear plants for creating electric energy and same energy is used for mining bitcoin?
I don't see that Bitcoin is creating so much pollution, and we can argue that more CO2 is probably created in production of food like cheese, wine and alcohol and I don't see anyone comparing that with bitcoin yet, but there are plans to ban use of meat.
What if country like France is using nuclear plants for creating electric energy and same energy is used for mining bitcoin?
I don't see that Bitcoin is creating so much pollution, and we can argue that more CO2 is probably created in production of food like cheese, wine and alcohol and I don't see anyone comparing that with bitcoin yet, but there are plans to ban use of meat.
Who thinks that multiple countries will end up imposing a carbon tax on crytocurrency owners & miners? If this is done, what would happen to the price of BTC? Do you think bitcoin would make changes to adapt (like ending mining sooner than 2140)?
Electric car owners use electricity. Do they pay for the carbon taxes? No, they get benefits for using "clean energy".
Would bitcoin miners have to pay carbon taxes for their consumption? Isn't it still electricity?
Electric companies should be (and are!) required to pay for their carbon footprint and that should translate into the price of the electricity. Higher price for electricity may make mining no longer profitable there and get relocated.
This is the correct and realistic path. Then you'll see how many miners actually work with cleaner energy than you use.
On the other hand, if you ask about carbon tax for crypto owners it means that you have no idea what you are talking about and you should read more before opening your mouth.
Would Bitcoin be secure with fewer miners?
Yes. I don't know the numbers, but it would clearly be still secure even with less miners. But as long as it's profitable, I don't see them give up.
Why would the community decide that we need to end mining sooner than 2140 just because there is a tax on their profits? I doubt there's any change in the protocol. Some might stop or pause their mining activities, the hash rate might drop but even if that's the case the network is still strong enough to resist 51% attack and so on. It's not like their profit will suddenly turn into -50%. IMO the majority might move from one place to another, find a new energy source to reduce the mining cost to keep increase their profits, and so on.
Who thinks that multiple countries will end up imposing a carbon tax on crytocurrency owners & miners? If this is done, what would happen to the price of BTC? Do you think bitcoin would make changes to adapt (like ending mining sooner than 2140)? Would Bitcoin be secure with fewer miners?
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost
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