Quebec, the Canadian Provence, has lifted a moratorium on the sale of electricity to cryptocurrency miners, but allows for the possibility of energy suppliers to charge different rates to cryptocurrency miners.
The move to lift the moratorium comes amid fears of government officials that they will miss out on potential revenues of the rapidly expanding industry, according to local reports. However, after the government lifted the ban, there are apparently conditions that would allow Hydro-Quebec to charge miners different, most likely higher, rates and have the ability to cut power to miners when the electrical grid is near max capacity.
The initial moratorium was implemented after more than a hundred mining firms approached Hydro-Quebec, the main energy supplier in the area, with an energy request totaling 10 TWh. Hydro-Quebec received so much cryptocurrency mining interest because it supplies some of the cheapest energy rates in North America. This power consumption would consume the majority of the excess 13 TWh that Hydro-Quebec currently has available. Concerns about being able to supply energy to other consumers quickly spread among government officials. Quebec’s Premier Philippe Couillard said, when the moratorium was initially implemented, that “we’re not really interested” and that “[t]here needs to be added value for our society; just having servers to do transaction mining and acquire new bitcoins, I don’t see the added value.”
Free markets provide solutions
The Quebec government’s plan to allow miners to operate, but with conditions creates a unique situation that will have interesting results. First, the government’s current solution is actually closer to a free market solution since they are not only allowing miners to operate, but also allowing the energy supplier to have more choice over how much to charge and whether or not to supply energy. This will led to a better allotment of resources among miners and energy consumers within the area. Second, and related to the previous point, this solution is actually a blend of second and third degree price discrimination, which is interesting since governmental agencies often attempt to ban this behavior for critical services such as healthcare, energy, roads, etc.
The allowance of second and third degree price discrimination will also offer an opportunity for increased efficiency. Second degree price discrimination allows a supplier to charge different prices for different quantities consumed (i.e. discounts on bulk goods or in this case increased rates for more energy used). Third degree price discrimination allows suppliers to charge different consumer groups different amounts (i.e. miners being charged different energy rates). Depending on how the exact laws are developed, the actions by the Quebec government will incentivize Hydro-Quebec to discover who the miners are and charge them higher prices, appropriately. Thus, it will also incentivize miners to use energy more efficiently to avoid losing more of their potential profits.
It is also worth discussing Quebec Premier Philippe Couillard’s statements on needing to provide “added value for [the] society”. His statements appear to overlook the basic goals of cryptocurrency. Cryptocurrency was invented to provide individuals an alternative to the current banking and governmental corporatism that charges excessive fees, misuses individuals’ money, practices malfeasance in manipulating the money supply, and kindles repetitive economic crises. Individuals wanted to escape, but had no readily accessible alternative from government fiat, until cryptocurrency came along.
Dash is a microcosm for a free market
Dash is built around incentivizing parties to make sure that Dash is developed in favor of the consumer. Mining costs and mining rewards send price signals to incentivize or disincentivize mining; Dash does the same, but also incentivizes masternodes to maintain the network beyond hashrates. This includes code improvements, service offerings, and network integrations facilitated through the Dash treasury system. There are also potential plans for new improvements that include collateralized mining to disincentivize attacks on the network. All these potential solutions are constantly checked against a free market of price signals, since any developmental actions taken solicits a reaction in the price and usage by consumers. This signals if the development is a positive or negative move for the future of Dash to the masternodes, whom have a heavily vested interest in the success of the network.
Additionally, the above features facilitates Dash’s assistance to people in need of financial and monetary freedom around the world. Dash has been able to maintain consistently low transaction fees, fast confirmation times, and security. Dash has also been able to fund outreach specialists around the world to educate consumers that cannot spare the time to learn about Dash. This has helped people in numerous countries such as Venezuela, Brazil, Ghana, Cameroon, Zimbabwe, and many more escape lousy banking and governmental institutions. Dash has leveraged its structure built around incentives to provide priceless social improvements to countless individuals, which makes the energy costs become even more negligible.