The Montana Senate recently passed a bill aimed at protecting cryptocurrency miners working in the state. Proposed legislation now before the state House of Representatives would protect Montana's private and commercial miners from discrimination laws by repealing some regulations that could harm their operations.
The bill specifically aims to protect miners from taxes on digital assets used as means of payment. It aims to allow local crypto miners to use less than 1 megawatt of energy per year, as long as it does not conflict with existing noise regulations.
It also wants to end any energy tariff classification that discriminates against local crypto and digital asset mining businesses.
The bill comes after years of concerted efforts by lobbyists and cryptocurrency companies to put more cryptocurrency-friendly laws on the government books.
Satoshi Action Fund CEO Dennis Porter spoke to Cointelegraph earlier this week about the latest developments. His non-profit organization helps shape policy by providing information to lawmakers and regulators highlighting the benefits of bitcoin mining.
"Montana has very high wind energy potential. According to NREL, it ranks fifth. However, in states like Montana, remote wind projects struggle because they need very long transmission lines to bring the energy to market," Porter told Cointelegraph. “Mining helps to solve this problem because it can be the main recipient of this energy. In general, Montana's energy is difficult to control because it is remote. Now the state can bring in its own [bitcoin miners] clients.
Porter says two "big factors" are holding back the cryptocurrency industry in the US: "The first is the misconception that mining is bad for the network or the environment. Mining is actually a powerful tool for balancing and cleaning up the network." Environment."
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According to the CEO, the second factor hindering mining in the US is the regulatory policy of mining, which does not take into account some of its positive aspects. As an example, he pointed to the concept of network balance.
"Mining is increasing in states with grid balancing programs," he explains. “These programs pay participants to reduce their energy use when energy prices rise or supplies are scarce. "Miners are well-prepared to participate in such programs, because miners can reduce energy consumption at the click of a button at any time of the day."
What are the benefits of Montana?
Proponents of the bill believe that the updated law will allow Montana to attract mining companies to the state, which they say will directly and indirectly contribute to the growth of the region's economy.
Speaking to Cointelegraph, Montana State Senator Daniel Zolnikov, the lead sponsor of the bill, said the region has a lot to gain from embracing the digital assets industry. He explained that by allowing unlimited cryptocurrency transactions, Montana could potentially attract more business and investment from the broader crypto sector:
"I hope that if my legislation becomes law, Montana will attract more digital asset miners, who will invest in Montana's many rural communities and create jobs where they are needed most."
"I hope this also sends a signal to the larger digital assets industry that Montana welcomes its innovation, as well as innovative startups to our state," he said.
Concerns about the continued development of cryptomining
Not everyone shares Zolnikov's optimism about the impact of cryptomining on small towns and communities.
While the influx of crypto-mining companies may lead to a short-term boom in development, Colin Reed, former mayor of Plattsburgh, New York, and a SUNY economics professor, says mining companies typically don't deliver on their promises. Creation .. Default In 2021, he told CNBC:
"All these promises of job creation are attracting states and cities that when you see it, and I see it, it's not true."
This could lead to an influx of cryptocurrency companies, which could lead to energy and sustainability issues.
New York state, for example, has had to deal with related issues since 2018, when it saw a surge in crypto-mining companies attracted to affordable energy. The situation has caused retail energy rates to rise due to increased demand, forcing the New York Public Service Commission to impose higher energy rates on cryptocurrencies to curb the problem.
States like Texas, where a significant number of cryptocurrency companies have started to operate, have also faced problems with uninterrupted power supply.
Power grids often face the problem of overloading during extreme weather events such as heat waves and winter storms. Because at this time, people often turn on air conditioners, which causes network overload. Sometimes the situation forces Texas miners to take their systems offline to reduce the load on the network.
Montana has more examples. In response to concerns about energy consumption and pollution, Missoula County requires cryptocurrency companies to use or generate enough renewable energy to power 100% of their operations.
The weather in Montana is draining. Summer heat in the state can sometimes reach 100 degrees Fahrenheit, and arctic blasts can cause freezing temperatures in the winter. Extreme temperatures have led to one of the highest levels of per capita energy consumption in the country.
Due to growing environmental concerns about the environmental impact of cryptocurrency mining, several states in the United States have introduced laws restricting such energy-intensive activities. Laws often place restrictions on energy consumption or the types of energy sources that can be used.
New York recently imposed a temporary ban on mining companies using non-renewable energy sources. The decision to soften the state's carbon footprint came after pressure from environmental groups. Montana could have a similar problem if the cryptocurrency bill passes.
Touching on some sustainability issues, Zolnikov said, "Montana already has an energy mix that makes it attractive to the digital asset mining industry, and my goal in introducing and passing this legislation is to provide legal certainty to continue digital asset mining in the state. It's been a long time..."
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Montana now has many geothermal, wind, solar and hydroelectric sources. The longest river in the United States, the Missouri River originates in western Montana, and its tributaries are also used to generate hydroelectric power.
A delicate balancing act
Montana's pro-crypto bill would encourage more crypto companies to set up facilities in the state. While its passage is expected to bring some positive changes to Montana, some challenges are expected, especially with green and sustainable energy.
Currently, the state has a wide range of renewable and non-renewable energy sources that can be used to generate more energy. However, it will be interesting to see how the state adapts to future changes when laws are passed in favor of cryptocurrency mining.
