How governments can control Proof of Work overnight by taxes.

[bitmeat]

You are mistaken if you think they care about a measly $10B being taxed.

They want to track who does what. It's about information. If they do a tax on mining it would be so they can track who is doing it.

[luckybit]

Proof of Work has a single point of failure around chip/hardware makers.

Assume for a moment the metaphor that computation resources are "the land". The land is the true wealth of the cryptocurrencies like Bitcoin, Litecoin, Storj, etc.

While governments cannot tax what we have on our land, they can tax the land itself.

All governments have to do to control Proof of Work is tax the computation resources which make up the land. So there is no way to avoid taxes because they can tax the chips we use to generate Bitcoins which effectively gives them a percentage of ownership of whatever is produced by those chips.

They can't do this with Proof of Stake. They know with Proof of Work the miners are in an arms race where they always have to buy the latest chips so they can raise taxes as high as they like on the certain chips but not others so as to influence which cryptocurrency gets used. Effectively if we assume the winners are the cryptocurrencies which get taxed least then in my opinion a special purpose ASIC chip which does nothing except mine Bitcoins/Litecoins is certainly the easiest to be taxed the most.

You tax general purpose chips and you effect the entire economy. So Intel/AMD chips will never be taxed. You tax ASICs and the only people who suffer are the cryptocurrency community of miners who use that particular chip. The chip isn't good for anything else so it would be just like taxing cigarettes.