This is justified by the claim that it will generate US$ 28 billion in new tax revenue over the next ten years but, as the article notes,
However, it’s not even clear that that money exists in the first place. Unlike miners on the blockchain, the Committee has yet to show their work. They published a table that outlines the expected revenue over the next ten years, but there is no justification for the numbers. There’s no indication of what might happen to the tax revenue if the cryptocurrency industry leaves the United States, there’s no range of possible outcomes under varying circumstances, and there is no note explaining whether or not this number is built off the assumption that the industry as whole is able to comply. The number is simply by decree, or fiat.
Yet, that was enough for Congress to include the section and the White House to celebrate it as the leading step in “strengthening tax enforcement” to offset the infrastructure bill.
No government would desire loss of control of its established currency. With cryptocurrency, this could happen to the U.S.A., unless laws and enforcement are enacted, which the feds are desperate to do. Still, it is hard to imagine how anti cryptocurrency laws will be enforced at a time when decentralization trends are accelerating upward faster than a SpaceX rocket.
So, except in 3rd world countries, and 3rd world states ( i.e. New York, Illinois, California, etc.), crypto is the future. GO BITCOIN!
Disclaimer: For God’s sake, do not put your life savings in cryptocurrency … or the U.S. dollar.
One new proposal in this year’s Budget, the Digital Asset Mining Energy (DAME) excise tax, is an example of the President’s commitment to addressing both long-standing national challenges as well as emerging risks – in this case, the economic and environmental costs of current practices for mining crypto assets (cryptomining, for short). After a phase-in period, firms would face a tax equal to 30 percent of the cost of the electricity they use in cryptomining.
Ethereum (ETH), the second-largest cryptocurrency by market capitalisation (based on price quotes on 2023-05-03, ETH US$ 222.4 billion, Bitcoin (BTC) US$ 547.1 billion), switched to proof-of-stake in “The Merge” on 2022-09-15. Prior to that, it was proof-of-work as Bitcoin was since inception and remains today. This was claimed to reduce the energy requirements to clear transactions by 99.9% and was the first step in a series of changes to that ever-evolving currency which founder Vitalik Buterin promised would improve efficiency and scaling.
Let’s see how this has worked out for Ethereum by looking at a chart of Ethereum per Bitcoin over the last year.
I have placed a yellow dot on the quote for 2022-09-14, the day before Ethereum went to proof-of-stake, when it closed at 0.08764 BTC. The next day, after the merge, it dropped to 0.074701, a drop of 14% in one day. It continued to plunge, stabilised a bit, and put in a short-term bottom on 2022-10-13 at 0.066457, a fall of 24% after adoption of proof-of-stake. It has bounced along since then, with today’s quote at 0.065500, still down 24% from the last day it was proof-of-work, having never once risen to that value in terms of BTC.
I’d say that, by the evidence, “legacy Bitcoin” is the one that has the edge.
As I recall Nick Szabo’s argument there never really was substance to the criticism of Bitcoin proof of work from the energy standpoint, when compared to traditional Financial institutions. While it might be argued that proof of stake is superior because of the energy savings I think Nick’s conception of a larger “argument surface” for proof of stake rendered it less viable on the whole.
The residual argument that ethereum supports UTM contracts could be decisive except for the fact that software engineering has not adequately addressed the “argument surface” of software engineering itself (independent of proof of stake’s argument surface). Some of that may be traced back to the harm that Moore’s law has done to software engineering as a discipline. Indeed it appears to have done harm to machine learning for similar reasons by sending everyone down the GPU-prior for learning algorithms. Lots of low hanging fruit there to empower insolent idiots, which deep-sixed the Hutter Prize, for example.
I’m wondering if anyone has gotten around to developing a proof of work algorithm that would not benefit from ASICs but require only the kind of computation that would discipline the chip industry to produce better general purpose CPUs.
