Originally published on: July 23, 2024
Senator Cynthia Lummis took a firm stance against President Biden’s proposed 30% excise tax on energy consumption by Bitcoin miners in a recent report release. Titled “Powering Down Progress: Why A Bitcoin Mining Tax Hurts America,” the report sheds light on the vital role Bitcoin mining plays in the energy grid of the United States.
Highlighting Bitcoin’s Clean Energy Footprint
In her report, Senator Lummis referenced the Bitcoin Energy and Emissions Sustainability Tracker, emphasizing that Bitcoin mining is cleaner than commonly perceived, with potentially over 52.6% of mining operations being emissions-free. The report underscores the positive impact of Bitcoin mining infrastructure on the energy grid’s stability.
Bitcoin Mining as a Grid Stabilizer
Senator Lummis elaborated on how Bitcoin mining facilities contribute to securing the energy grid by effectively balancing and redistributing energy during peak demand. Notable examples include collaborations between Bitcoin miners and the Electrical Reliability Council of Texas (ERCOT), showcasing how mining infrastructure serves as essential Controllable Load Resources for grid stability.
Tax Disincentives and Sustainability Efforts
Warning against the repercussions of imposing a 30% excise tax on Bitcoin miners, Lummis argued that such taxes could discourage the industry from adopting sustainable energy practices and innovative energy recycling methods. Examples like harnessing volcanic energy for mining in El Salvador and community heating initiatives powered by excess heat from mining facilities in Finland highlight the industry’s positive environmental impact.
Global Implications and Economic Considerations
Senator Lummis stressed that increasing taxes on Bitcoin miners could prompt the industry to relocate from the United States, resulting in decreased tax revenues—a phenomenon reflected in the Laffer Curve. With the exodus of Chinese miners following the country’s mining ban, there are significant implications for global Bitcoin operations and market dynamics.
Maintaining a Competitive Edge
The report reinforces the importance of supporting and incentivizing sustainable practices within the Bitcoin mining industry to ensure economic growth and competitive advantage on the global stage. By fostering an environment conducive to innovation and efficiency, policymakers can uphold America’s position as a key player in the evolving landscape of cryptocurrency mining.
In related news, the creator of Pink Drainer defends their wallet-draining crypto scam kit amid growing scrutiny.
