Key Insights
- There are currently 34 large-scale Bitcoin mines operating in the United States, according to the Times.
- The US mining companies, each consumes at least 3,900 megawatts of electricity or at least 30,000 times the amount used by the typical US home.
- There have been massive calls for regulation in the US, and several states are at different legal stages in a bid to regulate mining operations.
- Arkansas joined Montana among others, this year in proposing bills to regulate Bitcoin mining and provide legal protections to miners and their operations.
This week, an article describing the true cost of the digital race for Bitcoin was published by The New York Times.According to the Times, 34 large-scale Bitcoin mines are operating in the United States that place a massive strain on the electrical grids, while making money off of it.
A tremendous amount of power is needed to start and make money from Bitcoin mining.
Approximately every 10 minutes, a computer predicts a difficult combination of integers that solves complicated puzzles on the Bitcoin network.
Whichever computer correctly predicts this number first, is rewarded with as much as $170,000 worth of Bitcoin at the time of writing.
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While Bitcoin mining is a profitable enterprise on its own, the energy costs and carbon footprint of these operations can be devastating.
Because of these energy costs and massive carbon emissions that harm the environment, China, in June 2021, banned mining operations (despite being the largest bitcoin mining country in the world).
Since then, the USA has become the world’s Bitcoin mining superpower.
At the time of writing, it is unknown how much electricity is in these mining operations in the USA.
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However, The Times article mentioned 34 Bitcoin mining companies, and how they each consume at least 3,900 megawatts of electricity or at least 30,000 times the amount used by the typical US home.
This has caused massive calls for regulation in the country, and several of its 50 states are at different legal stages in a bid to regulate mining operations.
Bills On Regulations For Bitcoin Miners in Arkansas, Montana, and Texas.
Despite federal regulators like the Securities and Exchange Commission (SEC), which has fined and sued companies operating cryptocurrency exchanges, the U.S. state of Arkansas joined Montana, Texas and New York, among others, this year in proposing several bills.
These bills have been put in place to regulate Bitcoin mining, while also providing legal protections to miners and their operations.
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The seven states analyzed below, are currently making their way through legislative processes, while New York has crypto-mining regulations that have already been passed into law.
1) Arkansas
The Arkansas Data Centers Act of 2023, proposed by Republican Senator Joshua Bryant, was approved last week by the state’s House and Senate.
This bill aims to prevent discrimination against miners in several ways.
The rule forbids local governments from imposing restrictions for cryptocurrency miners that are different from those that apply to data centres, such as by unjustly targeting such enterprises through the rezoning of certain regions.
Moreover, it states that the Arkansas Public Service Commission, which oversees the state’s utilities, is not permitted to set “an unreasonably discriminatory charge” for consumers who engage in cryptocurrency mining.
However, before the measure becomes law, Governor Sarah Huckabee Sanders must sign and approve of it.
2) Montana
On Wednesday, the House of Representatives of Montana approved a bill that is similar to the miner-supportive law in Arkansas.
It is currently on Gov. Greg Gianforte’s desk and is awaiting approval
In detail, this bill recognizes that cryptocurrency mining “provides positive economic benefit” for persons and businesses in the US, and permits industrial and at-home miners to operate their businesses without intervention from the government.
Similar to the Arkansas law, the Montana legislation mandates that the government treat crypto miners and data centres equally, and prevent discriminatory electricity rates for these operations.
3) Missouri and Mississippi
Similar to the bills in Arkansas and Montana, proposed laws in Missouri and Mississippi aim to protect cryptocurrency miners.
The Missouri bill, which was initially put up in January, would similarly restrict the state’s ability to take action against such operations, such as banning its Public Service Commission from establishing discriminatory rates for a corporation engaged in digital asset mining.
The proposed law in Mississippi has wording that is similar to those of the proposals in Arkansas and Montana in that it would prevent the state from treating miners differently than data centres.
The state’s House approved the Missouri bill on March 7, but it looks to be taking a while to pass. The Mississippi state Senate, on the other, had approved the legislation in February, but the House of Representatives rejected it last month.
4) Texas
Texas Senate Bill 1751 would limit miners’ ability to participate in demand response programs and forbid tax breaks on specific bitcoin mining land.
One in-state miner named Riot Platforms called the legislation “misguided,” claiming it will result in more costly and unreliable electricity infrastructure.
The Texas Senate adopted the legislation on Wednesday after it was introduced last month. The state’s House of Representatives will now consider the bill.
5) Oregon
A bill from Oregon that was proposed in January will make it mandatory for energy-intensive facilities, such as those used for cryptocurrency mining, to lower their greenhouse gas emissions.
By 2027, for example, the measure would have required emissions to be 60% below baseline levels. It would also have mandated that owners of such facilities submit yearly reports to the Department of Environmental Quality as proof of compliance.
Each day of noncompliance would result in a $12,000 fine for each megawatt-hour in violation.
6) New York
The bill in New York about crypto mining is unique, in that it is no longer pending.
Gov. Kathy Hochul signed the bill in November, putting a halt to crypto mining companies that verify blockchain transactions using the proof-of-work method.
The measure states that such activities that rely on carbon-based electricity “affect compliance” with New York’s Climate Leadership and Community Protection Act and prohibits the state from allowing them for two years.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
