Governments cannot limit participation in the decentralization of Cardano

The US government is proposing to impose a 30% tax on crypto mining. The government’s decision can essentially drive Proof-of-Work miners out of the country in a relatively non-violent manner. If mining is unprofitable, there is no point in continuing. The U.S. and China are the two most economically powerful countries in the world that are pushing mining out of their territory. The problem with mining is that it is easy to detect and cannot be operated unless conditions are favorable. This contrasts with Proof-of-Stake networks like Cardano. If you hold ADA coins, the government can’t restrict you from participating in the decentralization of Cardano and getting the rewards. According to the analytics firm Morning Consult, 4% of Americans held ADAs in 2022. Any of them can participate in staking and very likely do. While Bitcoin’s decentralization will decrease as mining is curtailed, Cardano’s decentralization is gradually increasing every year. Dependence on a physical resource is an annoying and so far seemingly effective attack vector.


  • Crypto miners would have reporting requirements on the amount and type of electricity used. It kills anonymous mining.
  • PoW mining will likely shift from the US to Kazakhstan and Russia, where fossil fuels are used to produce electricity.
  • Staking itself is essentially a very hidden and anonymous activity that is almost impossible to curb and hard to prove.
  • Just keeping SEED in your head can make you an active staker.
  • In PoS networks, greed has a positive effect on decentralization.
  • Staking is equally available and profitable everywhere in the world.
  • A virtual resource is much more difficult to fight than a physical one.

This article was prepared by Cardanians with support from Cexplorer.

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