The Montana Senate recently passed a bill designed to protect crypto miners operating within the state. The bill, which is currently doing Working its way through the state House of Representatives, it seeks to protect individual and commercial miners in Montana against discriminatory laws by removing some of the rules that have the potential to undermine their operations.
Specifically, the bill seeks to protect miners against taxes on digital assets used as a means of payment. Additionally, it strives to allow home crypto miners who use less than 1 megawatt of power per year to do so, except where they contravene existing noise statutes.
In addition, it seeks to end any classification of energy rates that discriminates against domestic crypto mining and digital asset businesses.
The bill comes after years of concerted efforts by lobbyists and cryptocurrency companies to put more cryptocurrency-friendly laws on the state's books.
Satoshi Action Fund CEO Dennis Porter spoke to Cointelegraph about the latest development earlier this week. His nonprofit organization helps shape related policies. providing legislators and regulators with data that underscores the benefits of Bitcoin mining.
โMontana has very high wind power potential. It ranks fifth according to NREL. However, remote wind projects struggle in states like Montana due to the need for very long transmission lines that can bring power to market,โ Porter told Cointelegraph. โMining helps solve this problem because it can be an early buyer of that energy. In general, Montana has difficulty exporting its energy due to its remote location. Now the state can bring customers [Bitcoin miners] to them instead."
Porter said that there are two โmain factorsโ holding back the crypto mining industry in the United States: โThe first is the misconception that mining is bad for the network or the environment. Mining is, in fact, a powerful tool to balance the grid and clean up the environment.โ
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The second factor hindering mining in the United States, according to the executive, are the regulatory policies applied to mining that do not take into account some of its positive aspects. He singled out the concept of network balance as an example.
โMining thrives in states that have balance-of-grid programs,โ he explained. โThese programs pay participants to reduce their energy use when energy prices rise or there is a lack of supply. Miners are well prepared to participate in these types of programs because mining can reduce its energy consumption with the click of a button during any hour of the day.โ
How Montana Will Benefit
Proponents of the bill believe that with the updated legislation, Montana will be able to attract mining companies to the state, which they believe will boost the region's economy both directly and indirectly.
Speaking with Cointelegraph, Montana State Senator Daniel Zolnikov, who is the main proponent of the bill, said the region had a lot to gain by embracing the digital asset industry. He explained that by allowing crypto mining operations to run without restrictions, Montana could attract more companies and investment from the cryptocurrency sector in general:
โI hope that if my legislation becomes law, Montana will attract more digital asset miners who will invest in many of Montana's rural communities, creating jobs where they are needed most.โ
โI hope this also signals to the larger digital asset industry that Montana welcomes your innovation, as well as innovative startups in our state,โ he added.
Sustainability Concerns About Crypto Mining
Not everyone shares Zolnikov's optimism about the effect crypto mining could have on small towns and communities.
While the influx of crypto mining companies may result in a short-term surge in development, Colin Read, a former mayor of Plattsburgh, New York, and a SUNY economics professor, said mining companies typically don't deliver on their promises to create jobs. . In 2021, he said CNBC:
โCounties and cities are drawn to all these promises of job creation, which, when you look at it, and I have, just don't materialize.โ
It is also likely to cause an influx of crypto mining companies, and this could lead to energy and sustainability challenges.
The state of New York, for example, has had deal with related issues since 2018, when it saw a surge in crypto mining companies attracted to its affordable power. The situation caused retail energy rates to skyrocket due to increased demand and forced the New York Public Service Commission to introduce higher energy rates for cryptominers to control the problem.
Sustainable power supply issues have also arisen in states like Texas, where a sizeable number of crypto mining companies have set up operations.
Power grids often experience overload problems during periods of extreme weather conditions, such as heat waves and winter storms. This is due to the fact that the general public often turn on their air conditioning during these times, resulting in an overloaded network. At times, the situation has forced Texas miners to pull the plug in their systems to relieve strain on the network.
There are more examples within Montana itself. Missoula County, in response to concerns about energy use and pollution, has required crypto mining companies to consume or generate enough renewable energy to cover 100% of their operations.
Montana experiences demanding energy weather conditions. The summer heat in the state can sometimes raise to over 100 degrees Fahrenheit, and arctic gusts in winter can cause freezing temperatures. Extreme temperatures have contributed to the state having one of the highest per capita energy consumption rates in the country.
Due to growing environmental concerns surrounding the ecological impact of cryptocurrency mining, several US states have implemented laws imposing limits on such energy-intensive activities. Laws often place limits on energy use or place restrictions on the type of energy sources that can be used.
More recently, New York imposed a temporary ban on mining companies that use non-renewable energy sources. The decision was made with the goal of mitigating the state's carbon footprint after the increase pressure from environmental groups. Related issues are likely to arise in Montana if its crypto mining bill passes.
Zolnikov addressed some of the sustainability concerns, stating: โMontana already has an energy mix that makes it attractive to the digital asset mining industry, and my intent in introducing and hopefully passing this legislation is to provide legal certainty for that digital asset miners continue to operate. in the long-term state.
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Montana currently possesses a variety of geothermal, wind, solar, and hydro power sources. The Missouri River, the longest river in the United States, flows from western Montana and its tributaries are also used for generate hydroelectric power.
A delicate balancing act
Montana's pro-crypto mining bill is set to encourage more cryptocurrency mining companies to establish their facilities in the state. While its passage is expected to bring some positive transformations to Montana, some teething problems are expected, especially related to green and sustainable energy.
The state currently has a wide range of both renewable and non-renewable energy sources that can be harnessed for more power. However, it will be interesting to see how the state adapts to the emerging changes if legislation in favor of cryptocurrency mining is passed.
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