[darawk]

> To benefit from cheaper electricity, you have to use it, and traditionally that's been through employing people to operate machines. If the companies got a cash subsidy instead, they would probably pocket the cash without doing as much as they promised to do to get it.

Money is fungible. Whether they're saving it by having cheaper electricity or getting cut a check is irrelevant.

[jdietrich]

Electricity isn't fungible. There are substantial costs and efficiency losses involved in transmission, so electricity is significantly cheaper to supply if the consumer is right next door to a giant hydroelectric plant.

Energy-intensive industries that form part of the productive economy are exactly the industries that we want to use that power. We want aluminium smelters and chemical manufacturers to be sucking up that cheap, clean energy. It's an efficient use of resources.

Churning out gigajoules of waste heat to process kilobytes worth of transactions is not an efficient use of resources. It's a colossal waste that has done nothing useful except enrich a bunch of speculators.

[jessriedel]

Electricity is highly fungible. Just include the cost of the transmission losses in the price, as is done everywhere that prices aren't being dictated by law. (And regardless, on the scale of 50 miles these are small.)

It is not the job of local municipalities to decide whether Bitcoin transactions are worth the cost of electricity. How could they possibly have the expertise to decide questions like that?

[darawk]

Charge more for the electricity. Take the profit and cut a check to the productive companies. Problem solved.

[jdietrich]

If you charge the Bitcoin miners more, they will just leave - they go wherever they can find the cheapest electricity. I have no objection to charging the miners more, but your proposal seems to be a needlessly complex administrative option.

[darawk]

Indeed they will. Sounds like a problem solved to me. Charge a market rate for your electricity, then subsidize what you want to subsidize.

[s73v3r_]

And what about the residents of the area? Do they now just have to suffer with higher bills, or are they going to get a rebate too?

[darawk]

They should sell their power at a market rate. If they want to subsidize people or companies ex-post, then they should feel free to do that.

[394549]

> Money is fungible. Whether they're saving it by having cheaper electricity or getting cut a check is irrelevant.

That's wrong (and also kinda dogmatic). Money is fungible with itself, but it's not fungible with electricity. If a business gets a cash subsidy, they have all kinds of options to subvert the purposes that subsidy [1], but still collect the money. With cheaper electricity, the incentive is tied far more tightly to the actual activity of operations.

[1] which are to incentivize them to locate their operations in a particular place

[darawk]

If the local government is subsidizing them, then if they move to a different place, they lose the subsidy.

[394549]

> If the local government is subsidizing them, then if they move to a different place, they lose the subsidy.

No. What if they have operations in multiple locations? They could locate the bulk of their operations elsewhere, and only maintain the minimum presence in the jurisdiction of the local government to collect the subsidy.

With cheap electricity, they're incentivized to locate as much of their operations (that would benefit form the electricity price) as possible.

[darawk]

Tie the subsidy to electricity consumption. This really isn't hard.

[394549]

>>>>>>> If government-directed job creation is the desired goal, why not just hand the preferred companies cash? That would be a lot more transparent and targeted than subsidizing utilities Venezuela-style.

>>>>> Money is fungible. Whether they're saving it by having cheaper electricity or getting cut a check is irrelevant.

> Tie the subsidy to electricity consumption. This really isn't hard.

So you're conceding the point that there are important differences between "having cheaper electricity or getting cut a check," then? What you suggest is nearly indistinguishable from just having lower-priced electricity. The only difference is some extra paperwork and administration to get the lower price.

[darawk]

> So you're conceding the point that there are important differences between "having cheaper electricity or getting cut a check," then?

No.

> What you suggest is nearly indistinguishable from just having lower-priced electricity. The only difference is some extra paperwork and administration to get the lower price.

Nearly indistinguishable, except along the criteria in question. If you price electricity below market, you get free riders like the Bitcoin miners. They're certainly not the only ones either, just the biggest. If you instead subsidize the thing you actually want then you will get more of that thing, without the free rider problem. If you want to subsidize job creation, then do that, don't just have cheap electricity and then whine when people take you up on it.

[s73v3r_]

More like, they'll threaten to leave, and the local government will be pressured into continuing the subsidy to keep them. Or the new location will give more money. All while they don't do what they originally were supposed to be doing to get the subsidy in the first place.

[darawk]

I don't see what that has to do with anything? Give them a rebate on their electricity consumption. That's all you have to do.

[s73v3r_]

So make things more complex for very little gain.

[darawk]

And your solution is what? To ban bitcoin mining? That sounds quite a bit more complicated. Not to mention that it solves the problem in the specific case and not the general case, like mine.

[s73v3r_]

As in many things, appearances are everything.