(On Legitimacy of Blockchains - 3)
Another major weakness of PoW blockchains is that they are too vulnerable against regulations. Since the process of reaching consensus by grinding the computational power of a bunch of graphics cards is extremely energy-consuming, the government can easily spot the precise location of any miner by detecting a location in the electric grid which yields high usage of electricity. If the government decides to ban PoW-based cryptocurrency mining altogether, they will be able to do so pretty easily.
Someone may claim that such a type of regulation will inadvertently help the blockchain ecosystem circumvent the problem of "mining monopoly" by only allowing small miners to escape its means of enforcement (i.e. high power consumption). This, however, is more or less an illusion.
A mining pool which occupies an unreasonably huge portion of the blockchain's hash rate doesn't have to be concentrated in one particular geographic location. Since all nodes are connected through the internet, small pieces of mining hardware spread all over the world can simply merge their respective hash powers together in one anonymous pool and use it to dominate the blockchain's mining process. In such a case, consumption of energy won't be particularly high at any particular point in space; it will simply be evenly distributed across the globe.
And if we are to let this happen, what we are going to see is an even nastier form of corruption inside the blockchain in which only those who are wealthy enough to distribute their hash power throughout the world possess the privilege to dominate the mining industry. This will be reminiscent of bootlegging which proliferated during the alcohol prohibition of the United States from 1920 to 1933.