Sachin on Nostr: Nation states (Government entities) would largely be irrelevant and incompetent in ...
Nation states (Government entities) would largely be irrelevant and incompetent in Bitcoin mining at a scale that matters.
Mining at scale requires technical expertise, risk-taking and constant adaptation to changing conditions to be a profitable venture, which are things that government entities with constantly transferred bureaucrats with no specialised knowledge sitting at their helms will not be suited to. Revenues aren't guaranteed and people can't be coerced into using their mining services by creating a monopoly, like most PSU's do.
For proof of this, one only has to look at the state of balance sheets of Indian PSU's even with their regulatory advantage, cushion of public money (and public debt) and sometimes coerced monopolies.
As of 2022-23, 59 out of ~ 116 State PSU's in India were loss making.
As of 2019-20, as many as 84 out of ~ 250 Central PSU's were loss-making.
Entrepreneurs, skilled developers, technicians and private investors will always be better at it and will pay more and be more profitable than the Government.
Governments can only hope to compete with PPP's (Public Private Partnerships)
The argument against this would be that 'the state will simply take over and control the hash rate', which can't happen in places where governance is relatively decentralised (China) or rule of law and property rights are relatively sane and strong (US). India too has a set of laws that prevent the Government from arbitrarily coercing corporations.
Besides, if the Government 'takes over' or forces miners to accept transactions from only their jurisdiction, they will simply be outperformed by miners who don't do that and become unsustainable ventures and add to the already long list of expenses they have to incur.
Companies entering into PPP's would be smart enough to add a clause in the contract that prevents Governments from doing this.
Mining at scale requires technical expertise, risk-taking and constant adaptation to changing conditions to be a profitable venture, which are things that government entities with constantly transferred bureaucrats with no specialised knowledge sitting at their helms will not be suited to. Revenues aren't guaranteed and people can't be coerced into using their mining services by creating a monopoly, like most PSU's do.
For proof of this, one only has to look at the state of balance sheets of Indian PSU's even with their regulatory advantage, cushion of public money (and public debt) and sometimes coerced monopolies.
As of 2022-23, 59 out of ~ 116 State PSU's in India were loss making.
As of 2019-20, as many as 84 out of ~ 250 Central PSU's were loss-making.
Entrepreneurs, skilled developers, technicians and private investors will always be better at it and will pay more and be more profitable than the Government.
Governments can only hope to compete with PPP's (Public Private Partnerships)
The argument against this would be that 'the state will simply take over and control the hash rate', which can't happen in places where governance is relatively decentralised (China) or rule of law and property rights are relatively sane and strong (US). India too has a set of laws that prevent the Government from arbitrarily coercing corporations.
Besides, if the Government 'takes over' or forces miners to accept transactions from only their jurisdiction, they will simply be outperformed by miners who don't do that and become unsustainable ventures and add to the already long list of expenses they have to incur.
Companies entering into PPP's would be smart enough to add a clause in the contract that prevents Governments from doing this.