Cynthia Lummis believes that the Biden administration’s proposed 30% tax on electricity for Bitcoin processors is a detrimental concept that could have a detrimental impact on the industry.
Senator Cynthia Lummis is dissatisfied with the Biden administration’s proposal to impose a 30% levy on the electricity that Bitcoin producers consume.
She asserts that this action could disrupt the rapidly expanding Bitcoin mining industry in the United States, which experienced significant growth subsequent to China’s prohibition of Bitcoin mining.
China was the primary participant in Bitcoin mining until the Chinese Communist Party (CCP) suspended operations in 2021. They prohibited the extraction of Bitcoin, which made it possible for the United States to assume the role of global leader.
America’s robust energy market and rule of law rapidly attracted significant investments and top-tier talent in the Bitcoin mining sector.
In a few years, the United States has become the headquarters of numerous substantial Bitcoin mining enterprises. However, the Biden administration’s proposed new tax could potentially significantly alter this situation.
Cynthia believes that this tax has the potential to drive the industry out of the country and into the hands of other nations. Additionally, she believes that the Treasury’s justifications for the levy are predicated on antiquated perspectives regarding technology and energy consumption.
Cynthia intends to dispel the misconceptions surrounding the tax proposal in her report. She emphasizes the economic and energy advantages that Bitcoin mining provides, such as the generation of employment opportunities, the maintenance of energy infrastructure, and the promotion of innovation.
She is of the opinion that this tax would undermine these advantages and negatively impact a developing sector of the American economy. She dedicated time to elucidate the operation of the blockchain and the precise process of Bitcoin mining.
Miners have transitioned from personal computers to large-scale enterprises since the inception of Bitcoin in 2009. The United States became a preferred location for mining due to its abundance of affordable, dependable energy, robust property rights, and adherence to the law.
Although Cynthia acknowledges that the administration’s objectives are legitimate, she believes that the tax could have an adverse effect. She characterizes it as a policy that is inadequately designed and could potentially undermine the very objectives it is intended to achieve.
The administration asserts that Bitcoin mining poses a threat to the grid operations of local utilities, but it provides no evidence to support this claim. Research indicates that Bitcoin mining genuinely fortifies energy grids.
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