As an experienced energy and economic analyst, I strongly support Senator Cynthia Lummis’ critique of the Biden administration’s proposed 30% excise tax on Bitcoin miners. Based on my extensive research and understanding of both the Bitcoin mining industry and the broader energy sector, I believe that this tax would be detrimental to American innovation, economic growth, and infrastructure development.
On July 23rd, Representative Cynthia Lummis published a counterargument to the Biden administration’s suggested 30% levy on the energy usage of Bitcoin mining operations.
Lummis contends that this tax may significantly harm the expanding Bitcoin mining sector in the United States, owing to her perception of unjustified worries over potential environmental contamination and threats to the power grid.
Lummis’ Critique
Despite the sincere intentions behind the administration’s objectives, Lummis cautioned against approving this tax. She characterized the proposed policy as ineffectively designed and potentially detrimental to its intended goals.
The plan by the Biden administration to impose taxes on Bitcoin miners represents a clear threat to technological advancement, energy profusion, and the superiority of American achievements.
Read my orange paper that refutes this disastrous proposal below
— Senator Cynthia Lummis (@SenLummis) July 23, 2024
Lummis issued a caution that the suggested tax might cause Bitcoin mining businesses to relocate to more advantageous countries due to its potential impact. Referencing China’s past ban on Bitcoin mining and its aftermath where approximately 90% of the industry either shut down or transferred, she emphasized the importance of considering energy costs as the primary expense in Bitcoin mining. Thus, even minor tax hikes could result in significant damage.
Should the US impose a comprehensive tax on Bitcoin mining, there’s a strong likelihood that this activity would migrate elsewhere, resulting in missed economic gains and employment prospects for American towns and cities.
According to the administration’s stance, Bitcoin mining allegedly poses threats to local power utilities and grid functions without sufficient factual evidence. On the other hand, Senator Lummis asserts that Bitcoin mining could actually bolster energy grids. She elaborated that miners have the ability to promptly adjust their energy consumption in response to supply and demand fluctuations, thus averting potential power outages.
As a crypto investor and miner based in Texas, I’ve had the opportunity to collaborate with ERCOT (Electric Reliability Council of Texas) during extreme peak power demands, selling back approximately 1,500 MW during Winter Storms Elliot and Heather. Recent data from August 2023 reveals that Bitcoin mining contributes around 25% of the interruptible load in utility battery storage across the United States and Canada – a significant contribution to the grid’s overall capacity.
In a study conducted in 2023, it was discovered that Bitcoin mining could potentially be ten times more efficient than existing technology when it comes to maintaining grid frequency during power outages or disasters. Senator Cynthia Lummis highlighted this point, emphasizing that Bitcoin mining operations and electric vehicles share the commonality of being fully electric, with an increasing trend towards utilizing cleaner energy sources.
Approximately half of the energy consumed by Bitcoin miners, according to the Bitcoin Energy and Emissions Sustainability Tracker, comes from renewable sources and is continuously becoming more eco-friendly. Meanwhile, a study conducted by KPMG reveals that Bitcoin mining requires an amount of energy equivalent to that used by household appliances such as tumble dryers.
Economic and Infrastructure Benefits
As a researcher examining the potential impact of Bitcoin mining on America’s energy infrastructure, I believe Lummis makes a compelling point about the technology’s promise. However, it is essential to proceed with caution and continue studying its effects as it gains momentum. Imposing aggressive taxes on this industry could hinder our progress and keep our infrastructure rooted in outdated methods.
Lummis emphasized the economic advantages of Bitcoin mining for disadvantaged communities. He pointed out that miners represent legitimate American businesses, who pay taxes and bring about substantial growth in local development, particularly in underdeveloped rural areas or economically distressed regions.
As someone who has closely followed the cryptocurrency market for several years now, I strongly believe that the warning in the report is worth taking seriously. America has been at the forefront of technological innovation for decades, and Bitcoin mining is no exception. However, if we fail to create a supportive and stable environment for this industry to thrive, we risk losing our competitive edge and falling behind other countries.
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2024-07-25 01:26