Biden proposed 30% mining tax. what would impact on Bitcoin mining?

larry_vw_1955

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Quote from: Abiky on July 06, 2023, 07:01:02 AM

There's no really viable alternative for Bitcoin, unfortunately.

I'm not sure I like the proof of stake idea but maybe proof of hard drive space or proof of RAM maybe something like that could be feasible. thing is, i'm not sure those are totally environmentally friendly either since production of hard drives and memory probably has environmental consequences but maybe less than ASIC mining. but it still wouldn't be bitcoin. but i really don't think anyone is going to be able to stop bitcoin from existing using Proof of Work. that's how it was made and it can't really change from that. not even if a quantum computer appeared tomorrow that could break sha256 bitcoin would just be dead.

Abiky

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Quote from: larry_vw_1955 on July 05, 2023, 11:10:56 AM

and what would that something be exactly? isn't that the problem that there isn't really a good candidate for that? change bitcoin from Proof of Work and it really isn't bitcoin anymore. Because that would require a hard fork for sure.

There's no really viable alternative for Bitcoin, unfortunately. I was thinking something like a hybrid consensus mechanism (PoW + PoS) similar to what Peercoin is using today, but that wouldn't solve the problem of governments' alleged "high enery consumption". If you take away mining, BTC won't be the same. At least, the US has opened its doors to BTC miners. Tax rates are not that attractive, but that could change in the future as everyone lets their voice be heard. Once all parties (politicians, miners, etc) reach an agreement, the mining industry will flourish in the country.

I hope other countries become flexible in terms of PoW mining, to keep Bitcoin "flowing as usual". Banning PoW because of the "high energy consumption" will only make matters worse in the long run. The world needs pro-crypto government officials to speed up the "hyperbitcoinization" process. If all goes well, BTC may probably replace Fiat in the future. Who knows what will the US and other countries come up next? Just my opinion

larry_vw_1955

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Quote from: Abiky on July 05, 2023, 06:26:24 AM

Considering that most countries are turning "green", it's likely PoW mining will be banned in the future. Maybe BTC will change its algo to something better than PoS without compromising decentralization?

and what would that something be exactly? isn't that the problem that there isn't really a good candidate for that? change bitcoin from Proof of Work and it really isn't bitcoin anymore. Because that would require a hard fork for sure.

Quote from: Porfirii

I have witnessed it myself with all miners in Spain (big and small): back in 2017 the tax agency forced all miners to create a company or register as freelancers, which meant that they suddenly had to pay >300€/month regardless of their production just in order to be able to switch on their computer, plus between 25%-50% of their income in taxes every year. If we add the increase in the price of electricity to the equation, they simply killed Bitcoin mining in my country.

whether everyone obeys that new law is a different question though. you seem to think they do but i doubt it.

Quote from: HedgeFx

It is easy to expect that miners (at least the sizable ones) will leave the US in search of new countries with more favorable taxation. Obviously this could involve moving all the equipment to these countries

it depends. how do you move a oil field to another country? answer: you don't. you just pay up. or don't mine bitcoin.

and don't forget, just because you move out of the USA doesn't mean you don't have to pay income taxes to the USA unless you relinquish your American citizenship. that's just how it works. live where you want but you owe uncle Sam his taxes no matter where you live.

HedgeFx

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It is easy to expect that miners (at least the sizable ones) will leave the US in search of new countries with more favorable taxation. Obviously this could involve moving all the equipment to these countries

Quote from: LDL on March 10, 2023, 07:27:05 PM

President Joe Biden's administration has imposed a 30% tax on bitcoin mining electricity use. Bitcoin mining was not very profitable even though this tax was not levied in the past. But what impact will the new electricity cost have on Bitcoin mining?

Will this additional electricity tax attract new miners to Bitcoin mining?

What will be the impact on hashpower for a 30% mining tax?

Even before the imposition of this tax, some mining companies were in losses.
What are the old mining companies thinking about this tax?

Porfirii

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I'm not sure whether this policy would kill Bitcoin mining in the USA, but the impact for many legit miners would make them close up their business.

I have witnessed it myself with all miners in Spain (big and small): back in 2017 the tax agency forced all miners to create a company or register as freelancers, which meant that they suddenly had to pay >300€/month regardless of their production just in order to be able to switch on their computer, plus between 25%-50% of their income in taxes every year. If we add the increase in the price of electricity to the equation, they simply killed Bitcoin mining in my country.

Abiky

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Quote from: larry_vw_1955 on July 01, 2023, 08:00:39 PM

why would someone use bitcoin if they had to pay 30% tax on every purchase? that sounds like someone with a solution looking for a problem...

That my friend would be "overtaxation". It's something done by the government to intentionally drive away people from crypto/Blockchain tech. India tried to do it, but it failed. For now, the US will require miners to pay a 30% tax on their income. I don't think this will be approved by Congress, especially when there are many pro-crypto politicians in the country. Americans had enough with the SEC drama against exchanges. Adding more burden to the industry will simply drive innovators and companies away from the US.

One thing for sure is that PoW mining is a hotly-debated subject due to its "high energy consumption". Considering that most countries are turning "green", it's likely PoW mining will be banned in the future. Maybe BTC will change its algo to something better than PoS without compromising decentralization? Just my thoughts Grin

larry_vw_1955

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Quote from: Flexystar on June 30, 2023, 07:02:31 AM

Take an example of Indian tax system. There were the first to levy tax slot of 30%. What is surprising is, this is not only for miners, this is basically for everything you do in association with the crypto. They still use crypto and nothing happened in terms of crypto economy.

why would someone use bitcoin if they had to pay 30% tax on every purchase? that sounds like someone with a solution looking for a problem...

Flexystar

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It doesn't matter. It will anyway get compensated against the company book. For example there are electricity bills, cost of construction, mining maintenance which means employees around the mining farm and their salaries. I think it would be benefit the user in terms of their credit history building as they would be paying high taxes. Moreover this will be only levied once miner sell their crypto currencies. Whenever they will sell the crypto they will profit, they will have expenses to calculate, everything will substract at the end. The nett proceeds is what they will get charged for. The tax slot is huge but it does not mean that it is gonna impact the crypto economy badly. Take an example of Indian tax system. There were the first to levy tax slot of 30%. What is surprising is, this is not only for miners, this is basically for everything you do in association with the crypto. They still use crypto and nothing happened in terms of crypto economy.

larry_vw_1955

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Quote from: leepx on June 28, 2023, 08:06:22 PM

Why not help miners within your country? I have always been curious why countries make learning and gathering information on subjects so hard that competitive countries get a head start.

miners don't mean anything to the usa government. but it does make laws that it thinks help the environment like phasing out gas powered lawncare equipment and things like that.

leepx

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Why not help miners within your country? I have always been curious why countries make learning and gathering information on subjects so hard that competitive countries get a head start.

larry_vw_1955

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Quote from: philipma1957 on April 19, 2023, 11:13:57 PM

Using btc mining profits to build solar arrays does not hurt the environment.

we have built three arrays with btc profits.

45k
115k
275k

comes to over 2 mega watts a day.

I should not be treated like a piece of shit coal based miner polluting like mad to burn coal.

I should pay -10% on my power bill and coal based miners should pay 30% on their bill.

yeah that's the part of the proposed legislation that makes no sense. they throw in the good guys along with the bad ones....i understand an excise tax on someone that's using electricity from the power grid to run their operation but not for someone that generates their own electricity using solar panels. that doesn't make any sense at all. Huh

people that are conscientious and trying to use solar for mining shouldn't be punished. if that crap passes, solar miners need to band together and make some formal complaints because that sh** aint right...

FP91G

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Quote from: mikeywith on April 19, 2023, 05:36:51 PM

Quote from: FP91G on April 19, 2023, 10:53:43 AM

In Sweden, taxes will increase more. $0.0006 was a miner's paradise

Energy prices started to normalize in 2023, but the upcoming tax will likely stop any new investment in Sweden, which is currently home to about 150 megawatts (MW) of mining. The tax will increase from SEK 0.006 ($0.0006) to SEK 0.36 ($0.035) per kilowatt hour (kWh) starting July of this year, according to the financial budget published in November 2022.

Based on the average electricity prices last year, the tax hike could bring the all-in energy cost to $0.093/kWh, said Jaran Mellerud, senior analyst at mining services firm Luxor Technologies. A MicroBT Whatsminer M30s, a moderately efficient and commonly used machine, would be at break-even point given current market conditions, he said.
https://getblock.net/en/news/sweden-will-raise-the-electricity-tariff-for-miners-58-times/

Is it 3.5 cents per kilowatt hour or is it 9.3 cents? I am not sure what all-in energy cost means, if the tax is going to increase the cost from 0.6 cents to 3.5 cents where does the remaining 5.8 cents come from?

Anyway, 3.5 cents is way below average = great for mining, 9.3 cents is above average and terrible for mining.

If miners in Sweden pay tax as in Kazakhstan, then 0.035 US dollars is a tax or excise, which means the cost of electricity is 0.093-0.035=0.058. This is a mining tax, and you also need to pay income tax. The big mining companies don't say how they buy electricity, but almost 10 cents is expensive to mine.

philipma1957

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Quote from: larry_vw_1955 on April 19, 2023, 10:13:25 PM

Quote from: kano on March 16, 2023, 02:21:03 PM

A typical company earns BTC to pay for the power.

as long as they have a predictable income that they know 100% sure they can pay for the power by using unrealized income then ok. but you don't go into a convenience store and eat a candy bar and then try and pay for it but then complain about the tax saying you can't afford it...

Quote

In this case it simply increases your electricity cost by 30%, so decreases your profit, and increases tax revenue from you.

what's wrong with that?

Quote

Read the topic:

yeah to kickstart a discussion. guess who created this thread. oops maybe it wasn't me this time. Embarrassed

Quote

Your philosophical opinions of types of taxes are not the topic.

It's a simple - more tax, less revenue directed at mining.

it's not a tax it would be an excise tax. get your facts straight... Shocked

buying a candy bar doesn't harm the environment and contribute to higher electricity prices for everyone and also contribute to global warming. you still pay sales tax on the candy bar but an excise tax ON TOP OF THAT would be unnecessary.

excise taxes really aren't taxes at all, they are penalties for doing something bad that contributes to negative outcomes in the real world. therefore if someone insists on doing that activity they should be responsible enough to pay up for the damages they are causing don't you think?

Using btc mining profits to build solar arrays does not hurt the environment.

we have built three arrays with btc profits.

45k
115k
275k

comes to over 2 mega watts a day.

I should not be treated like a piece of shit coal based miner polluting like mad to burn coal.

I should pay -10% on my power bill and coal based miners should pay 30% on their bill.

larry_vw_1955

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Activity: 1036

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Quote from: kano on March 16, 2023, 02:21:03 PM

A typical company earns BTC to pay for the power.

as long as they have a predictable income that they know 100% sure they can pay for the power by using unrealized income then ok. but you don't go into a convenience store and eat a candy bar and then try and pay for it but then complain about the tax saying you can't afford it...

Quote

In this case it simply increases your electricity cost by 30%, so decreases your profit, and increases tax revenue from you.

what's wrong with that?

Quote

Read the topic:

yeah to kickstart a discussion. guess who created this thread. oops maybe it wasn't me this time. Embarrassed

Quote

Your philosophical opinions of types of taxes are not the topic.

It's a simple - more tax, less revenue directed at mining.

it's not a tax it would be an excise tax. get your facts straight... Shocked

buying a candy bar doesn't harm the environment and contribute to higher electricity prices for everyone and also contribute to global warming. you still pay sales tax on the candy bar but an excise tax ON TOP OF THAT would be unnecessary.

excise taxes really aren't taxes at all, they are penalties for doing something bad that contributes to negative outcomes in the real world. therefore if someone insists on doing that activity they should be responsible enough to pay up for the damages they are causing don't you think?

royalfestus

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Merit: 516

What are the prospects of solar power replacing government power sources for mining if regulations are supportive? When will the issue of power usage in mining end in the USA and other regions? Mining has become a privilege of the wealthy due to the costs involved, including equipment expenses. However, with the potential profitability of mining, the affordability of necessary equipment may not remain a barrier for long

mikeywith

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be constructive or S.T.F.U

Quote from: FP91G on April 19, 2023, 10:53:43 AM

In Sweden, taxes will increase more. $0.0006 was a miner's paradise

Energy prices started to normalize in 2023, but the upcoming tax will likely stop any new investment in Sweden, which is currently home to about 150 megawatts (MW) of mining. The tax will increase from SEK 0.006 ($0.0006) to SEK 0.36 ($0.035) per kilowatt hour (kWh) starting July of this year, according to the financial budget published in November 2022.

Based on the average electricity prices last year, the tax hike could bring the all-in energy cost to $0.093/kWh, said Jaran Mellerud, senior analyst at mining services firm Luxor Technologies. A MicroBT Whatsminer M30s, a moderately efficient and commonly used machine, would be at break-even point given current market conditions, he said.
https://getblock.net/en/news/sweden-will-raise-the-electricity-tariff-for-miners-58-times/

Is it 3.5 cents per kilowatt hour or is it 9.3 cents? I am not sure what all-in energy cost means, if the tax is going to increase the cost from 0.6 cents to 3.5 cents where does the remaining 5.8 cents come from?

Anyway, 3.5 cents is way below average = great for mining, 9.3 cents is above average and terrible for mining.

FP91G

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Activity: 1610

Merit: 1026

In Sweden, taxes will increase more. $0.0006 was a miner's paradise

Energy prices started to normalize in 2023, but the upcoming tax will likely stop any new investment in Sweden, which is currently home to about 150 megawatts (MW) of mining. The tax will increase from SEK 0.006 ($0.0006) to SEK 0.36 ($0.035) per kilowatt hour (kWh) starting July of this year, according to the financial budget published in November 2022.

Based on the average electricity prices last year, the tax hike could bring the all-in energy cost to $0.093/kWh, said Jaran Mellerud, senior analyst at mining services firm Luxor Technologies. A MicroBT Whatsminer M30s, a moderately efficient and commonly used machine, would be at break-even point given current market conditions, he said.
https://getblock.net/en/news/sweden-will-raise-the-electricity-tariff-for-miners-58-times/

larry_vw_1955

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Quote from: NotFuzzyWarm on April 04, 2023, 06:46:04 PM

Links please or it's just random Internet rambling...

people can't google...

https://au.finance.yahoo.com/news/texas-bill-limiting-benefits-crypto-192739843.html

NotFuzzyWarm

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Quote from: royalfestus on April 04, 2023, 02:45:22 PM

Texas' anti-Bitcoin mining bill passed through Senate committee uncontested without a single opposition vote today. It is on the "uncontested" list, which means it has a 95%+ chance of passing the Senate. There is a possibility that Texas will become a global hub for mining.

Links please or it's just random Internet rambling...

royalfestus

hero member

Activity: 2408

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Texas' anti-Bitcoin mining bill passed through Senate committee uncontested without a single opposition vote today. It is on the "uncontested" list, which means it has a 95%+ chance of passing the Senate. There is a possibility that Texas will become a global hub for mining.

Topic: Biden proposed 30% mining tax. what would impact on Bitcoin mining? (Read 574 times)