Kentucky lawmakers have recently introduced two bills offering generous tax breaks to lure crypto miners to the state in an effort to revitalize many of the state’s dormant coal fields in rural areas. The bluegrass state is not the only one looking to incentivize crypto miners to set up shop in their locale.
China’s Crackdown On Crypto Miners
The Chinese government recently shut down bitcoin mines in Sichuan and party-controlled newspapers predict 90% of China’s bitcoin capacity will be halted. This follows similar shut downs in Inner Mongolia and Yunnan regions amid demands that Beijing crypto mines be shuttered due to massive energy consumption.
Similar actions have been taken by Iran’s government while India’s crypto mining policies have shifted back and forth.
With these shutdowns, questions remain as to how crypto miners, also known as hashers, will keep up with demand? Well, several U.S. states are attempting to lure them in.
States Trying to Lure Crypto Miners
Kentucky is not the only state seeking to attract bitcoin miners. Wyoming, Nebraska and Illinois have all introduced new legislation aimed at incentivizing crypto miners to begin operations there.
Texas is vying for crypto mining dominance, as well. News of continued grid failures and outages due to non-regulated energies are offset by the fact that power is cheap and plentiful there (when the grid is working). The Lone Star state is already home to mining companies like Bitmain, Blockcap, Argo, Blockchain, BIT, Layer1 and Compute. Some crypto mining operations are tapping gas-vent capture technology for power, which is plentiful among the state’s many oil and gas producers.
Concerns Over Energy Consumption
The enormous amounts of energy needed to mine crypto currencies has become part of the global dialogue on reducing dependence on fossil fuels while investing more in renewable energy sources.
Tesla CEO, Elon Musk shined a spotlight on this issue temporarily halting the practice of accepting bitcoin for new cars. In a statement Musk said:
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.”
Illinois passed a new digital asset charter that allows financial services using cryptocurrencies to apply for a banking charter. To further entice hashers to set up mining operations there, the state has been putting a lot of focus on renewable energy sources.
“With nearly a dozen commercial nuclear power reactors at six sites, generating half of the state’s electricity, Illinois can guarantee emissions-free “green” power for the foreseeable future,” according to the Illinois Environmental Council.
Other states are also looking to capitalize on the growing demand for cheap renewable energy by crypto miners. Compute North has a new center in Kearney, Nebraska that targets large capacity users like bitcoin miners.
“The facility is set up to accommodate large-capacity users with over 1MW of requirements by delivering accessible, affordable, reliable and secure collocation to people from all over the globe,” according to a press release shared with Bitcoin Magazine. “The combination of power and connectivity with the low energy costs of the site makes it capable of efficiently handling blockchain, machine learning, crypto mining, and more.”
Is The U.S. Poised To Become The Epicenter of Crypto Mining Activity?
There are few countries as crazy for crypto as the United States. A significant portion of the population is interested in or has invested in bitcoin even as stock prices surge and nosedive. Its mainstream popularity is driven by social media influencers, particularly celebrities, professional athletes, and famous business leaders.
New legislation is hastening along the process of adopting cryptocurrency as a legitimate form of currency, though it is many years away from completely replacing dollars and cents.
Some would argue that the demand for crypto and miners will drive more states to seek renewable energies to support mining. Others see it as a way to create jobs in the fossil fuel space that has been declining in use as the world leans away toward more renewable sources of power.
Regardless of your opinion about bitcoin and the energy consumption needed for mining it, cryptocurrencies appear to be here to stay. With this trend, states around the country are moving quickly to bring those miners in with tax breaks, investments in renewable energy or offers of cheap fossil fuel power.