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I try to stay apolitical, but this one cracked me up:

<rant on> SEC actually regulate something?  Heard of Patrick Byrne and the story on overstock.com?  By keeping the DTCC opaque, and allowing market-makers to naked-short, they practically encour

Are bitcoins kind of like marina  shower tokens? In British Columbia?    

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20 minutes ago, Lochnerian Tom said:

Stablecoins will ruin us all!!!

Much like PayPal has.

Yea, tether and usdc make tax collection 'problematic'.  They've tried to delay dealing with the issues by some heavy duty kyc requirements but that won't work under a broad adoption scenario. 

It is a problem - the more libertarian argument is that 'money without government' is the endgame.  But governments can't exist without taxes.  So this IS an existential threat to the status quo.

If this whole thing goes financially nuclear, its going to reshape the tax landscape and taxes will have to shift from income base to asset based taxes.  You WILL be taxed on what you have, instead of what you earn.  That's the only way out of the corundum.

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4 minutes ago, BeSafe said:

You WILL be taxed on what you have, instead of what you earn. 

I seem to recall some rather large payments last month of property taxes, based on what we have. We have sales tax too, so taxes are on what you earn, what you have, and what you spend.

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4 minutes ago, Lochnerian Tom said:

I seem to recall some rather large payments last month of property taxes, based on what we have. We have sales tax too, so taxes are on what you earn, what you have, and what you spend.

Yup - and if you take away one of the pillars, the others will go up to compensate.

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  • 4 weeks later...

China's Bitcoin Crackdown Is Good for America

The annual China crackdown is more severe than past ones and is actually driving out some miners, who seem to be heading to Khazakstan and to the USA, among other places.




The bitcoin network is resilient. Almost overnight, Chinese mining operations started packing up their ASICs and looking for more hospitable climes. For bitcoin miners, time really is money. Each hour their expensive hardware remains offline means forgone bitcoins to recover capital costs and earn profits.

Bitcoin miners needed a new, non-hostile home, and they needed it quick. They found a welcoming one in the state of Texas. Not only does Texas house a bustling cryptocurrency scene in Austin, power is cheap and abundant—two things that miners love. Furthermore, the state has taken steps to pass pro-Bitcoin laws that encourage the development of the industry in the state.

Today, the United States is the world leader in bitcoin mining, hosting some 35 percent of the global hashrate. The runners up are Russia (11 percent) and China's neighbor Kazakhstan (18 percent)—the latter absorbed many of the runaway Chinese miners in the wake of the CCP ban. Kazakhstan is suffering its own civil unrest at the moment, so we may see miners move once more, perhaps to nearby Russia or even a farther destination like the United States.

This is not to say there is no mining in China. A plucky underground of illegal bitcoin miners still whir away in Sichuan, trying their best to make some money and not get caught. There are no official figures, but some estimate that these bitcoin bootleggers might constitute some dozen or so percent of the hashrate. How sustainable this covert practice is remains to be seen.

The Chinese bitcoin mining ban was great for bitcoin and the United States. The network withstood a fifty percent hashrate shock with little disruption. Mining infrastructure quickly recalibrated and relocated to other more welcoming locations. Now that a similar dynamic is occurring in Kazakhstan, seasoned bitcoin users don't need to fear that the network will be disrupted (even though weak hands may see this as a reason to sell). In terms of uptime, bitcoin keeps on delivering.

The great mining migration of 2021 is a fantastic opportunity for the United States.

A common line of attack is that bitcoin is "bad for the environment." This is the excuse China gave for banning bitcoin. Let's side aside the facts that spending energy on good things (like secure sovereign money) is … good, and that we "waste" more energy on things like Netflix alone without blinking an eye. In truth, Bitcoin encourages parsimony in energy expenditures because miners have an economic incentive to get costs down as low as possible.

Bitcoin miners might be the most energy-conscious technology ever invented. They want to make money with energy as cheaply as they can. One cool innovation: natural gas flare harvesting. The natural gas industry has to literally burn off excess gas into the air because there is nothing they can do with it when demand is too low. Bitcoin miners have started forming partnerships with natural gas companies to turn that wasted energy into mined bitcoins. It's a fantastic illustration of how bitcoin mining can encourage better energy use and environmental practices.



The bolded part is equally true of metals mining and really lots of businesses. Bitcoin miners use stacks of computers and gold miners use lots of heavy equipment but at the end of the day they both have capital and energy expenses and want to keep those down.

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Bitcoin mining allowed local entities in China to turn 'government supplied energy' into hard western currency - which was far more useful than actually turning the 'government supplied energy' into products to sell.  China isn't using any less power because they stopped bitcoin mining - they just shifted to something else to sell.

From the IEA:




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