this post was submitted on 15 Apr 2025
10 points (81.2% liked)
Bitcoin
1392 readers
2 users here now
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
The DAO happened six years before Ethereum switched to Proof of Stake. Forking was probably the wrong call but the users voted with their feet and Ethereum Classic is still there if anybody wants to use it. Payments do decrease as a larger percentage of all Ethereum is dedicated to staking. Proof of Stake is not economic rent, the stakers only receive payment while they continue to perform their duties faithfully, if they fail or cheat they are instead penalized and lose their status.
I know, I was an ETH user myself until then. The reason they did the bailout was because they were afraid the hacker would risk PoS.
Do you agree that stakers are making a profit - a higher return than the cost of bringing the factor into production?
They clearly do expect to make a profit, otherwise they wouldn't stake. But rent is only one part of profit and in this case, where the activity does require some amount of effort, skill, and risk, and is subject to competition both from other stakers and from other chains, categorizing it as rent is an error.
Economic rent is when the owner of a factor of production is paid more than the costs of bringing it into production. It doesn't imply literally zero skill/effort/risk.
I'm suggesting that it's better to set those profits on fire than it is to give them away below cost, just for owning something.
That's a greatly oversimplified definition that would capture essentially all productive activity. If I paint someone's house and charge them more than the cost of paint, am I earning economic rent? As the owner of my tools and my own labor, the answer according to that definition would be yes.
In your hypothetical, you're paying the cost of bringing the painted house into production with your labor, not getting paid just for owning something.
A closer comparison would be landlords who claim "being a landlord is a job" because they pay themselves to paint the house (or other property management).
Being a landlord can be a kind of hybrid, it depends. If you just own land and collect rent while doing nothing to provide value to anybody then yes, all you're going is gatekeeping access to something that you didn't make which is basically the textbook definition of economic rent and it's parasitic. Using your labor and capital to build or maintain an improvement (like a house) and then leasing that out isn't economic rent, it actually is a real job just like any other, but only for the portion of the income that is due to the improvement; the lion's share of the income is almost always due to land ownership so it's still parasitism but with a garnish of legitimate work.
I don't think reading only the first sentence of the Wikipedia/Mirian-Webster definition in isolation is very helpful, you really have to dig deeper if you want to have a good sense of what economists are really trying to communicate with the concept of economic rent.