[NEWS] Biden budget proposes 30% tax on crypto mining electricity usage - page 3.

tbct_mt2

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Quote from: Lucius on March 10, 2023, 09:51:04 AM

I have previously disagreed with your theories about how illegal BTC miners and electricity theft will be the solution to maintaining decentralization, and I can even less agree that this would ever be the case in the US. It's not some third-class country where you can steal large amounts of electricity and stay off the radar long enough to make a profit.

Electricity theft to mine Bitcoin for more profitable. I guess there are people doing this just like they steal electricity for their family usage or for other activities. Mining Bitcoin is one of use cases for their stolen electricity.

Again this is like an accusation that Bitcoin is used for Ponzi, for drug market etc. but we can not flip the coin and say the opposite, Bitcoin is responsible for Ponzi scheme, drug or darknet markets.

I have never read any report about percent of Bitcoin miners use stolen electricity to mine it. Any idea?

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Quote from: bbc.reporter on March 09, 2023, 10:16:41 PM

~snip~
On account of this, I speculate that there is a chance that illegal mining and stealing of electrcity might rise in America. Is there a chance that American gangs and cartels might be interested in mining internet money?

I have previously disagreed with your theories about how illegal BTC miners and electricity theft will be the solution to maintaining decentralization, and I can even less agree that this would ever be the case in the US. It's not some third-class country where you can steal large amounts of electricity and stay off the radar long enough to make a profit.

Gangs and cartels are an even less likely outcome, because firstly they are not intelligent enough to deal with it, and then secondly they would have to steal electricity again or get into trouble when trying to sell mined coins. Drugs, prostitution, weapons, people smuggling and similar criminal activities generate a mountain of money.

Smack That Ace

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Quote from: thecodebear on March 09, 2023, 10:38:24 PM

Govt is going the wrong way with Bitcoin just due to lack of knowledge and misinformation.

The government is the head of a country; how can it be said that they lack knowledge and misinformation? Before they want to make any decisions, there is discussion and consultation with specialized advisors. I don't think they are dumber than us, and can become the president of the most powerful country in the world. They know it all but will only find ways to benefit them, they will never accept something unchecked, not in their favor, even jeopardizing their power.

aysg76

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Quote from: pooya87 on March 10, 2023, 01:09:42 AM

True but Chinese government also didn't wake up some day deciding to outright ban bitcoin mining. They have been putting more and more restrictions on it over the years at least ever sine 2013.

Right and I clearly remember how many times they have used the term ban for bitcoin usage over these years.For the Chinese government anything that's granting you freedom is enemy to them and bitcoin was directly hitting their financial sector but the digital Yuan is also not coping well as their desired CBDC.The China government was putting constant pressure on miners for few years before they come up with direct ban but hashrate was not affected after some time and less China centric so same will be the case with US government.

Quote from: pooya87 on March 10, 2023, 01:09:42 AM

It depends on the scale of the mining the individual is doing. It is actually very easy to detect the home miners considering their electricity usage is way beyond the average.

Besides laws like this is usually auto enforced! Meaning the individual miner hearing such a law would stop on their own willingly or end up paying the tax fearing jail time.

Most of the Individual miners would automatically shut it down because they are already not making too much and giving out all in kind of taxation would not benefit them a lot so out of fear they would not mine.For those saying they won't catch them who are mining in your house then you might have heard rumours saying NSA also monitoring your daily small activities so don't overlook them Grin

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Quote from: mk4 on March 09, 2023, 10:46:58 PM

From 10% to 30%. A huge ass jump that I don't think there's any reason for mining companies to stay in the United States. What's probably going to be left is the home miners who may or may not declare their mining operations.

I guess India was better at this by straightly imposing a 30% tax on crypto income directly.
So we basically have to pay 30% from our profits on crypto trading to the government.
I know thats a huge cut from our profits but at least we didn't go from 10% to 30% . Lol .
Still, it at least makes crypto trading legal in India (for the time being).

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Quote from: Jet Cash on March 10, 2023, 08:22:30 AM

In England, you can get a grant towards the cost of electricity used in heating your house. If you use mining rigs to heat your home, will it be eligible for a grant?

No, there was already a discussion on it on this forum a few weeks ago.
You're eligible if you reduce the electricity consumption, a bitcoin miner will just act like any other 3000W heater on the market, produce the same heat for kwh consumed, and the grants will only be for replacing a system with a far more efficient one, like switching from a gas or oil boiler to a heat pump.

Quote from: NotATether on March 10, 2023, 08:31:00 AM

Well the news says "tax" on it, therefore it will be blocked by Republicans in congress before it even becomes law, because they never like tax increases. Not even for something so ridiculed as cryptocurrency. It's one of the tenants of their political philosophy.

Quite funny, Democrat voters own more coins but want more regulations also, Republicans have a lower percentage of coin owners but want fewer regulations and laws. Just went again over the text, quite interesting:

Quote

Firms engaged in digital asset mining would be required to report the amount and type of electricity used as well as the value of that electricity, if purchased externally. Firms that lease computational capacity would be required to report the value of the electricity used by the lessor
firm attributable to the leased capacity, which would serve as the tax base. Firms that produce or acquire power off-grid, for example by using the output of a particular electricity generating plant, would be subject to an excise tax equal to 30 percent of estimated electricity costs.

There is no mention of renewables, so if it goes like this if you have a solar panel farm that you use to feed your miners you're still going to have to pay a tax even if it's for personal use and you're not tied to the grid and never have been.
Not going to pass! Never!

NotATether

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Well the news says "tax" on it, therefore it will be blocked by Republicans in congress before it even becomes law, because they never like tax increases. Not even for something so ridiculed as cryptocurrency. It's one of the tenants of their political philosophy.

Flexystar

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Quote from: bbc.reporter on March 09, 2023, 10:16:41 PM

I speculated about this before but I was called an antagonizer and a fud spreader. However, it is here. The Biden administration is pushing out bitcoin mining by making it more difficult to make profit through raising their taxes. They cannot do a blanket ban similar to the Chinese way because America's government structure is less centralized than China's government structure.

On account of this, I speculate that there is a chance that illegal mining and stealing of electrcity might rise in America. Is there a chance that American gangs and cartels might be interested in mining internet money?

There would be consequences for sure however we don't know if the sanctions will come to effect that aggressively. In addition, America will have to segregate the unit rate for every state and county based on consumption. They will have to create a cost chart based on the unit consumption. Let us say that the average household is consuming around the 30 units, then electricity board could set that if anything goes above 30 unit then that would be commercial. While mining can eat up even more electricity then they could keep different rates for let us say anything that goes above 100 units.

The real question is whether they are going to pay that much money. Simply no, because it won't be profitable at all.

Quote from: bbc.reporter on March 09, 2023, 10:16:41 PM

United States crypto miners could eventually be subject to a 30% tax on electricity costs under a budget proposal by President Joe Biden aimed to “reduce mining activity.”

Read in full https://cointelegraph.com/news/biden-budget-proposes-30-tax-on-crypto-mining-electricity-usage

So it still need approval. The office knows if they implement such strict window for taxation then eventually miners will shift to crypto friendly nations, where taxes are low or free of charge. They will loos fair amount of business soon.

Jet Cash

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In England, you can get a grant towards the cost of electricity used in heating your house. If you use mining rigs to heat your home, will it be eligible for a grant?
Electricity is far to valuable to waste on pushing cars around, especially as the current EVs are massively damaging to the environment, and force up the cost of home heating and industial use of electricity. It would be far better if the 30% tax was imposed on EVs when more energy efficient ICE vehicles could be used.

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Quote from: un_rank on March 10, 2023, 01:26:27 AM

What country do you guys expect to become the new mining hub?
This is a list^[1] which shows top countries for mining by country after United States:

Ireland: 4.68%
Germany: 4.48%

These two are wrong examples, they just grabbed data and forgot to mention what Cambridge says, those percentages are most likely because of datacenter IPs through which traffic is routed, not that the mining happens there.

But not only that, there is another problem, assuming the US has 1/3 and 1 million mining gears.
Even considering optimal efficiency it's going to be 30 Twh, Kazastan only has 90 Twh total production and already having trouble supplying that, there are basically only two options left with cheap and enough spare electricity to replace the US. One is Canada and the other is Russia. Since obviously the second one is a no-go zone, not for US business at least, we're left with miners migrating from the US to Canada, pretty simple in terms of logistics but that would obviously lead to even more centralization of hash power.

Quote from: pooya87 on March 10, 2023, 01:09:42 AM

It's a good thing considering how US regime has been anti-Bitcoin and anti-freedom. Remember MARA pool? We know they will continue pressuring anything Bitcoin related (including mining, development, exchanges, ...) to go against Bitcoin principles, censor transactions,

Says the guy who wants to ban ordinals transactions, oh, the irony!

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Quote from: worle1bm on March 10, 2023, 01:42:46 AM

The governments have nothing to look after environmental issues and they only put forward these excuses just to gain money through these tax implementations but 30% on mining operations is really high.They are directly targeting them with these manners but most of them will relocate to other favourable place where they won't have to pay off such high taxes meaning another loss for Biden government.

And it seems that Biden and his administration are trying to get rid of those miners but that huge tax toll on their shoulders and it really doesn't sound good as it affected the market very bad, now the price of bitcoin is below $20k when this news was released and everyone had it's own interpretation.

And I guess there's no other option, maybe shift to a more friendly countries to be able to continue mining.

worle1bm

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The governments have nothing to look after environmental issues and they only put forward these excuses just to gain money through these tax implementations but 30% on mining operations is really high.They are directly targeting them with these manners but most of them will relocate to other favourable place where they won't have to pay off such high taxes meaning another loss for Biden government.

un_rank

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- Jay -

What country do you guys expect to become the new mining hub?
This is a list^[1] which shows top countries for mining by country after United States:

Kazakhstan: 18.1%
Russia: 11.23%
Canada: 9.55%
Ireland: 4.68%
Malaysia: 4.58%
Germany: 4.48%
Iran: 3.1%

Russia would not not be a choice destination for many now, but there are still many options. Maybe growth of bitcoin mining in Africa.

Quote from: thecodebear on March 09, 2023, 10:38:24 PM

I mean it could only be used on mining companies, not individuals, and only mining companies that are paying for electricity on-grid. Though I suppose mining companies are probably the vast majority of the mining being done in the US these days.

The article highlights off-grid electricity as well meaning those miners would fall under the reach of the tax increase, especially if they have been paying previous taxes. pooya87 also made a good point that no one would want to mistakenly evade taxes and risk going to jail.

[1] https://worldpopulationreview.com/country-rankings/bitcoin-mining-by-country

- Jay -

pooya87

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It's a good thing considering how US regime has been anti-Bitcoin and anti-freedom. Remember MARA pool? We know they will continue pressuring anything Bitcoin related (including mining, development, exchanges, ...) to go against Bitcoin principles, censor transactions, even attack Bitcoin. If hashrate decreases inside United States, that's an excellent thing for Bitcoin's future and security.

Quote from: bbc.reporter on March 09, 2023, 10:16:41 PM

They cannot do a blanket ban similar to the Chinese way because America's government structure is less centralized than China's government structure.

True but Chinese government also didn't wake up some day deciding to outright ban bitcoin mining. They have been putting more and more restrictions on it over the years at least ever sine 2013.

Quote from: thecodebear on March 09, 2023, 10:38:24 PM

I mean it could only be used on mining companies, not individuals, and only mining companies that are paying for electricity on-grid.

It depends on the scale of the mining the individual is doing. It is actually very easy to detect the home miners considering their electricity usage is way beyond the average.

Besides laws like this is usually auto enforced! Meaning the individual miner hearing such a law would stop on their own willingly or end up paying the tax fearing jail time.

SquirrelJulietGarden

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Quote from: bbc.reporter on March 09, 2023, 10:16:41 PM

I speculated about this before

I remembered they revealed their intention to do this two years ago if I am not wrong. There are some states in the USA. months ago announced that they did not plan to ban cryptocurrency mining entirely, they only want to control it and get tax from it.

Quote

United States crypto miners could eventually be subject to a 30% tax on electricity costs under a budget proposal by President Joe Biden aimed to “reduce mining activity.”

Read in full https://cointelegraph.com/news/biden-budget-proposes-30-tax-on-crypto-mining-electricity-usage

The fact is in the USA. that proposal won't easily to be passed. We know that in the USA. Congress, there are increasing Senators support Bitcoin and cryptocurrency. The number of such Senators increases with time that is a good signal for this industry.

I really believe that there will be no completely ban on Bitcoin or cryptocurrency.

This part is completely a shit show but we know it for years, they failed to accept and say a fact.

Quote

the Treasury claimed the energy consumption of crypto mining operations “has negative environmental effects

Anyone want to discover fact, check in Bitcoin Mining Council's Q4 2022 report and BitcoinCleanUp's Bitcoin is already using clean energy

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Quote from: bbc.reporter on March 09, 2023, 10:16:41 PM

On account of this, I speculate that there is a chance that illegal mining and stealing of electrcity might rise in America.

For small miners it may be, but any major mining company is going to move.

Quote from: thecodebear on March 09, 2023, 10:38:24 PM

I don't even understand how that would work.

It won't.

Quote from: mk4 on March 09, 2023, 10:46:58 PM

From 10% to 30%. A huge ass jump that I don't think there's any reason for mining companies to stay in the United States. What's probably going to be left is the home miners who may or may not declare their mining operations.

This.

A small increase in taxes could be assumed, because leaving the country also has a cost, but I think the increase is so great that they would consider moving to a country with low taxes. Besides, the cost of leaving is one-off, while the tax payments are constant, so they will amortise the move quickly.

Plaguedeath

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Again and again it's about environmental harms, the answer about Bitcoin mining cause environmental harms can be found here https://bitcoincleanup.com/

Quote from: https://cointelegraph.com/news/biden-budget-proposes-30-tax-on-crypto-mining-electricity-usage

“An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms.”

There's a chance the old miner will mine in illegal without telling to the government, but electricity in America isn't cheap, so they might consider to move to other countries even if they have a family or already familiar with the other countries with cheaper electricity and not strict government.

mk4

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From 10% to 30%. A huge ass jump that I don't think there's any reason for mining companies to stay in the United States. What's probably going to be left is the home miners who may or may not declare their mining operations.

thecodebear

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I don't even understand how that would work. I mean it could only be used on mining companies, not individuals, and only mining companies that are paying for electricity on-grid. Though I suppose mining companies are probably the vast majority of the mining being done in the US these days.

Also it just completely misunderstands the entire role of Bitcoin mining, though that's not surprising considering most people think mining just wastes electricity. Sad to see policy proposals based on misinformation though. The point would be to basically punish what govt sees as a bad use of energy, but of course bitcoin mining is enormously beneficial to society on its own (not even counting the fact that its beneficial to bitcoin which itself is enormously beneficial to society). If bitcoin mining is gonna be taxes why isn't all electrical usage taxed 30%? Makes no sense to single out a specific industry for its electrical use. That's just horrendous policy.

Govt is going the wrong way with Bitcoin just due to lack of knowledge and misinformation.

bbc.reporter

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I speculated about this before but I was called an antagonizer and a fud spreader. However, it is here. The Biden administration is pushing out bitcoin mining by making it more difficult to make profit through raising their taxes. They cannot do a blanket ban similar to the Chinese way because America's government structure is less centralized than China's government structure.

On account of this, I speculate that there is a chance that illegal mining and stealing of electrcity might rise in America. Is there a chance that American gangs and cartels might be interested in mining internet money?

United States crypto miners could eventually be subject to a 30% tax on electricity costs under a budget proposal by President Joe Biden aimed to “reduce mining activity.”

Read in full https://cointelegraph.com/news/biden-budget-proposes-30-tax-on-crypto-mining-electricity-usage

Topic: [NEWS] Biden budget proposes 30% tax on crypto mining electricity usage - page 3. (Read 498 times)