Biden Proposes 30% Climate Change Tax on Bitcoin Miners
In what comes as a major setback for crypto miners in the US, the White House is lobbying Congress to include a 30% tax on the cost of the electricity used to mine cryptocurrencies in the upcoming federal budget. This development comes on the heels of the US government’s repeated claims about potential damage to the environment caused by a subset of the cryptocurrency industry.
The United States claims cryptomining poses a threat to society
According to a recent report to be released at the White House today, the President’s Council of Economic Advisers (CEA) argues that cryptominers’ high energy consumption has negative ripple effects on the environment, quality of life and power grids where such businesses are located.
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Cryptocurrency mining is being unfairly targeted, according to those opposed to the planned tax. The widespread crypto crackdowns by regulators and now a proposed bill to impose hefty taxes stand out as a sore spot for the larger crypto market and as part of a larger anti-crypto crusade. According to Tom Mapes, head of energy policy at the Chamber of Digital Commerce, who spoke to Yahoo News, stated that “this is just a way to go after the industry that they don’t support.”
Bitcoin’s PoW in controversy
Bitcoin’s Proof-of-Work mechanism has long been appreciated and debated since its inception. Massive supercomputers compete with each other to be the first to solve a mathematical puzzle in the process of PoW cryptocurrency mining. According to a report published by the White House last September, cryptocurrency mining uses more electricity than the whole of Australia. It is estimated that cryptocurrency mining accounts for 0.9% to 1.7% of total electricity use in the United States, which is home to about a third of all mining.
Recently, the Cryptocurrency Environmental Alliance (CEA) stated in a post that “currently, cryptocurrency mining companies do not have to pay for the full cost they impose on others, which includes local environmental pollution, higher energy prices, and the massive impacts of increased greenhouse gas emissions on the climate.”
At the time of writing, Bitcoin’s price is currently trading at $28,046 with a market cap of $544 billion.
Also Read: US Investors Are Abandoning Crypto Exchanges, But Where Are They Going?
