A small piece of good news for the global climate

Scott P @1: Three thoughts:
(1) this is true of Bitcoin, but not so for Ethereum (which has a hard-coded rate of increase).
(2) you’re right, and to the extent that miners fund their operations by cashing in “miner reward coins”, this will be a problem for the BTC ecosystem
(3) but already we’re seeing the rise of “transaction fees” required to get your tran to be accepted by a miner (and included into a block someday before next century). It was always expected that these fees would be the eventual source of funding for miners.

The problem really boils down to the “insanely, brutally wasteful consensus algorithm” that BTC (and all its descendants) chose. Proof-of-work is intrinsically wasteful: it spends resources at each miner, as they try to compete to produce the next valid block. If we reduce the cost of that activity (to each miner, who is working independently, mind you), we attract more miners. John Q. noted above that as the number of miners drops, the global BTC “algorithm” changes a parameter to make mining “easier”. Conversely, if more miners join, the algorithm will adapt to make mining harder. All to keep the rate of block-production as constant (10min/block) as possible.

So if you decrease the “intrinsic cost” of operating a miner, you won’t change the resources expended on mining — you’ll just attract more miners. Assuming that the value of BTC doesn’t crater. John’s right, that the only real way this can end “sanely”, is for BTC to crash in value: that’s the only way that miners will exit.

if you squint hard enough, you can squeeze the light into a silver lining.

Bitcoin’s potential demise has no effect upon the institutions that ensure that speculative boondoggles will continue to drive a significant degree of current economic combustion.

Only a radical social democratic capture of Finance could do that. Bitcoin’s potential demise does not hasten this change.

But it is good to note the absurdities, I’ll grant you that. Just no squinting, please.

Since the other thread is closed, maybe I am permitted a remark here. FN mentioned Austudy and asked whether similar programs existed elsewhere. The German BAföG was mentioned and it is an interesting case study. BAföG (federal education support, https://de.wikipedia.org/wiki/Bundesausbildungsf%C3%B6rderungsgesetz) was introduced in 1971 as a typical socialdemocratic reform to promote lower class students’ access to higher education. It was initially a non-repayable, no strings attached transfer payment to students from low income families. It is what allowed two siblings and myself to attend and complete university. It’s not a scholarship for specially gifted students (in Germany “merit-based” scholarships play almost no role and tuition is still free). It’s also a right that eligible students can sue for if they are denied it.

Although BAföG was introduced in 1971, a predecessor was introduced in 1957 by the Adenauer CDU government. The SPD government expanded it and established a *right* to education support that eligible students could sue for. In 1982, the SPD government was replaced by the soft-Thatcherite, “neoliberal” CDU under Kohl. Kohl together with the small liberal party FDP went on to win four elections (the last only barely but the others convincingly) and was only displaced in 1998 by the “neoliberal”-turned SPD under Schröder (together with the Greens). Note to leftist delusionists: the SPD ran and lost against Kohlian neoliberalism four times, then they moved right and started winning again. Not the other way round.

The Kohl turn had dramatic consequences for poor students: from 1983 to 1990, BAföG was reduced to a grant that had to be repaid (albeit at zero interest). It was not voter revolt but the unification that in 1990 forced a correction. In the GDR, a basic income for students independent of background had existed since 1953. Now the government turned BAföG into a mix of 50% transfer payment, 50% grant. My older brother had the bad luck of studying in the worst of times and had to repay everything. I was luckier. I repaid far less than half, at zero interest. By the end of the Kohl era, the proportion of poor students eligible for BAföG at universities had reached a low point (13%).

Schröder didn’t return BAföG to its former glory but enacted many improvements. The repayable portion of BAföG was capped at 10’000 Euros and eligibility was extended. The proportion of low income students went up to 25% by 2003 but declined to 20% by 2016. The Merkel grand coalition government also enacted improvements. Relatedly, there was a short-lived attempt to introduce tuition fees. The Kohl government never dared go in that direction but hardline state governments tried, around 2006. Even though the fees were low by US standards, the resistance prevailed. Since 2014, no public university charges tuition.

The BAföG (and tuition) saga is an interesting lens through which to look at the political changes of the last 30 years. There clearly was an anti-welfare-state turn in the 1980s, which perhaps the term “neoliberalism” helps describe, and which, sadly, was popular with voters. The welfare state hasn’t quite recovered from this turn but it is not true that the pendulum has moved only in one direction. Social democratic policy has changed, compared to the 1970s, but comparing “third way” social democrats like Blair and Schröder to Thatcher and Kohl is absurd. Btw “third way” was the official policy of the SPD at least since 1959 (Godesberger Programm) – what new is there under the sun?

Otoh it is impossible to overlook that even the Kohl-era BAföG (together with free tuition) was more generous than anything that for example would be possible in the US. And yet, and yet, despite decades of relatively generous funding, Germany still falls short of providing equal access to higher education because educational “capital” is still concentrated in the middle and upper classes. Perhaps this proves that reformism really doesn’t work. Real equality cannot be established in a class society. Of course not, by definition.

But for millions of people, yours truly included, reformism has worked and has provided opportunities that they otherwise wouldn’t have had, and I don’t see a better alternative on the horizon.

Dan White: Luca Pacioli didn’t think big enough. Onward to thousandfold-entry accounting!

@ James Sutherland

Of course you must know that people can continue to believe things that are not true long after the rational analysis has shown them to be false (flat earth, etc etc ). Longevity does not imply that “we” don’t understand it. On the contrary the evidence from the dot-com boom/bust and other bubbles is that we understand them all too well.

Its a pity that gullible retail investors are being scammed again, and that there is no strong regulation to stop these schemes.