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No Food for Thought

Green or Grey: Subsidies for Cryptocurrencies?

admin Monday August 27, 2018

For as long as I have been adult, I have been part of a kind which was not common, at least at the time: an ecologist opposed to subsidies for green technologies. I have always believed in the polluter pays principle, which says we must discourage polluting activities (and not encourage less polluting activities). On specific cases, such as grey cars (more commonly called "green cars"), I disagreed with people I esteem. My stance has always been that we should not subsidize by 1 Euro to encourage use of cars that pollute "less", but rather tax usage of cars which pollute - including grey cars, such as hybrid cars.

On a topic which used to be completely different, since Bitcoin was created, I have been explaining to people why "cryptocurrencies" are worthless. For me, the crypto hype's intensity has always been a sad sign of how widespread the lack of economical education is.

Today, I read a news story which proved how bad the crypto hype has become: "Cryptocurrency" mining now accounts for almost 1% of the World's energy consumption. On the face of it, this is bad news for the environment.

But seeing what some are trying to minimize this issue proves more interesting. Capitalism is based on agents doing everything economically viable to maximize their gains (or at least - particularly in this case - the gains they expect). Mining is a race; if we make mining "more efficient", miners will simply mine even more; there is no end to the appetite for "coins" when companies buy into the frenzy and people start trying to make a living from mining. In this case, it becomes obvious that our simplistic inciting measures are useless at best.

The only way to end this madness, besides economic education, will be to internalize the cost of pollution. That may mean resisting pressure from lobbyists, but the good news is that will finance States, rather than using State means to finance those who degrade the environment.