August 10, United States The Senate voted to pass a $1 trillion bill Revitalize the infrastructure of the United States. From the perspective of the crypto community, especially the miners, the Senate’s attempt at crypto legislation is a disaster. Unless the language of the definition of brokers in the bill is clarified, it will block the growth of the domestic industry that is taking off.
In writing, the bill allows multiple interpretations of the term “broker”. In English, there is no real dispute or ambiguity regarding the broker’s work.According to Merriam-Webster’s online dictionary, a broker is “a person who acts as an intermediary: for example […] An agent who negotiates sales and purchase contracts (such as real estate, commodities, or securities). “In traditional finance, brokers buy and sell financial assets such as stocks and bonds for their clients. Compare this with Bitcoin miners (Bitcoin), the dominant cryptocurrency. Compared with brokers, Bitcoin miners solve cryptographic puzzles to verify new blocks, which is a basic activity of Bitcoin network operations. Miners receive Bitcoin as compensation for providing this computing service. Therefore, they are definitely not brokers.
Unfortunately, the bill passed by the Senate contains too many Broad and ambiguous language In the definition of “broker”:
“Anyone (for consideration) who is responsible for regularly providing any service that performs digital asset transfers on behalf of another person.”
Threats to the BTC mining industry
When defining brokers in this way, the Act requires mining companies to provide regulators with the same information that stockbrokers need to provide, such as taxable net income or losses, buyer/seller identity, transaction amount, and location of the transaction. In short, miners cannot collect this information because they only verify the block, not the information in it. Therefore, if miners are regarded as brokers in this language, they will not be able to comply with the law. This uncertainty, whether intentional or not, poses an existential threat to the Bitcoin mining industry in the United States.
Crypto mining is essential to the function of the proof-of-work cryptocurrency network, the most famous being Bitcoin. Without mining, many revolutionary aspects of blockchain technology would not be possible. For example, decentralization, accountability, verification, and security are all possible through mining. Without mining, there would be no Bitcoin network.
Currently, the US crypto mining industry is expanding. The stable government, cheap energy, surplus land and strong economy make the country an attractive place for crypto miners. The adoption rate of Bitcoin among individuals and companies is increasing-as the adoption rate is established, the U.S. industry is increasing employment opportunities for financial professionals, software developers, engineers, marketers, and facility managers.
Many Americans hold Bitcoin balances, and many people around the world use Bitcoin to transfer income and wealth to households in different countries. Citizens of countries with poor currency management believe that the Bitcoin network can maintain purchasing power in the face of rapid currency depreciation. In short, the United States is an important player in a rapidly growing market that provides value to millions of people. With China’s distrust of Bitcoin’s decentralization and market-based spirit, this role is expanding. Action taken to shut down mining Within its boundaries.
The Senate bill recaptured defeat from the mouth of victory. Just as the U.S. crypto mining industry will expand exponentially, the uncertainty created by the bill’s ambiguous language is hindering investment. In our company, we have experienced this firsthand. Thanks to the bill, employment, wages, and the resulting consumer spending have been put on hold-a sad irony given that the purpose of the bill is to support economic growth and create jobs.
Unless the language in the bill is amended to clarify that miners are not brokers, the United States will miss several of the benefits provided by crypto mining, such as grid stability, the capitalization of stranded energy, and the reuse of wasted energy. Encrypted mining enhances grid stability by helping utilities balance supply and demand. When energy is cheap and abundant, miners maximize profits and provide utility revenue when prices are low. When energy demand increases and prices rise, crypto miners stop mining, thereby releasing energy supply to the grid and reducing prices for other users.
Crypto mining and energy consumption
The argument that encrypted mining wastes energy goes backwards. Encrypted mining does not waste energy, but uses energy that would otherwise be wasted. Energy producers will not fine-tune their output to perfectly match supply and demand. Due to the mismatch between supply and demand, energy is often produced but not used, and/or lost due to long-distance transmission.
The most cost-effective miners are close to the utility’s power source. The bitcoins “produced” by these miners do not increase the demand for additional energy, but instead use energy that is produced anyway. Therefore, in addition to providing investment and employment opportunities for the local economy, crypto miners also promote stronger power grids, reduce energy waste, and generate revenue that utility companies can use to transform operations from fossil fuels to renewable energy.
There is hope
With these and other benefits in mind, the Senate’s attack on cryptocurrency mining is both puzzling and frustrating. But the US House of Representatives still has an opportunity to correct regrettable language.Although Proposed Amendments to the Senate Infrastructure Bill It was not adopted, and the fact that it was provided shows that the Senate has some support for crypto mining. The House of Representatives may pass different infrastructure bills. If this happens, the negotiators in the House and Senate may draft a final bill clarifying that crypto miners are not brokers. This will be the best result of the industry and the economy.
As the demand for Bitcoin and other cryptocurrencies is increasing, crypto mining will take place somewhere. If the crypto mining industry continues to expand domestically, it will be better for the US economy and environment. The first step in making the United States a leader in crypto mining is to clarify that miners are not brokers. Failure to do so will have long-term effects and prevent the United States from becoming a leader in this fast-growing industry.
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.
The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.
William Somerset Is the CEO and founder of Sazmining Inc., a cryptocurrency mining developer and consulting company, and All crypto mining: Sazmining podcastHe is optimistic about the future of Bitcoin as the world’s major digital reserve asset, and believes that Bitcoin is the first layer of sound currency solutions. William grew up in Maryland and studied psychology and management at Bucknell University. William uses his spare time to exercise, meet friends and read.