30% Tax on Bitcoin’s Electricity Input is Proposed

Stephen Perrenod
ILLUMINATION
10 min readMar 16, 2023

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And yet Bitcoin’s electricity input is Greener than Tesla’s charging

In this article, I use minting and minters to describe what happens when Bitcoin is created, rather than mining and miners, because it is a more accurate analogy.

Nothing in this article should be construed as investment advice.

No AI software was used in the writing of this article. If it had been, it would have been a one-time use of high-performance computing facilities, with 38% green or nuclear-generated electricity, on average. Bitcoin, on the other hand, is created by high-performance computers, has long-term value, can be used over and over, and is over 50% green.

Representation of a Bitcoin computer farm
Representation of a Bitcoin computer farm, generated with an AI program on high performance computers with approximately 38% green and nuclear electricity. Might be reused. Copyright 2023, Stephen Perrenod

What is it? Not helicopter money

Bitcoin is a digital currency with a market cap of half a trillion dollars. If it were a company with that market cap, it would be the tenth largest in the world. It has reached that level in 14 years, despite having no CEO or VC funding, or marketing department. It has an ecosystem or economy that grew organically. Bitcoin grew organically rapidly because of its appealing characteristics for storing and transmitting value.

Bitcoin is the premier fully digital currency, and can only be created by machines, not by committees. It engages in no fractional reserve banking, no risky lending, no quantitative easing, no bailouts, no airdrops.

“In November 2002, Ben Bernanke, then Federal Reserve Board governor, and later chairman suggested that helicopter money could always be used to prevent deflation.” — Wikipedia, Helicopter Money

In this past week we are seeing money “helicoptered” into the banking system to backstop depositors with large deposits not covered by FDIC insurance, in the wake of three bank failures in the US (Silicon Valley Bank, Silvergate Bank, Signature Bank) as well as in Switzerland where authorities are shoring up Credit Suisse bank. Technically taxpaper money is not used in the US case, but the FDIC reserves are very low, they will have to increase their insurance premium rates for existing banks. Bank failures make it harder for The Federal Reserve…

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Stephen Perrenod
ILLUMINATION

supercomputing expert, astrophysicist, technology analyst, orionx.net, author of DarkMatter, DarkEnergy, DarkGravity