Biden proposes 30 percent tax on cryptominers' power bills
- Reference: 1683183493
- News link: https://www.theregister.co.uk/2023/05/04/us_crypto_electricity_bill_tax/
- Source link:
The [1]Digital Asset Mining Energy excise tax – DAME for short – would require firms to pay a tax equal to 30 percent of the electricity bill consumed by computers used to make digi-dollars after a phase-in period that begins at the start of 2024.
In 2024, firms engaged in digital asset mining would pay 10 percent of their bill in tax, before the rate rises to 20 percent in 2025 and hits 30 percent in 2026.
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The White House predicts the efforts will raise $3.5 billion in revenue over a decade.
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"Currently, cryptomining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate. The DAME tax encourages firms to start taking better account of the harms they impose on society," reads a White House statement.
According to the administration, the amount of electricity used for cryptomining in the US in 2022 was close to that required for residential lighting of the entire nation.
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A [6]New York Times investigation found that the most power intensive Bitcoin mining operation in America, Riot Platforms' mine in Rockdale, Texas, uses around the same amount of electricity as the nearest 300,000 homes combined.
Around a mile away from Riot Platforms' Rockdale mine, a Bitdeer mine was reportedly paid $175,000 an hour to turn off its cryptomining computers during a February 2021 [7]winter storm that downed Texas’s power grid for days, [8]killed 246 individuals and led to the unwelcome shut down of Samsung's semiconductor facility in the midst of a global silicon shortage.
The administration cited a study that found pollution from energy generation is more prevalent in low-income neighborhoods. It noted that competition for power contributes to increased electricity prices and strain on infrastructure, and energy consumers feel the squeeze.
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The White House specifically said the DAME tax was "not a panacea" and "only one example of the Administration's efforts to fight climate change, reduce energy prices, and increase access to electrified options for all Americans."
[10]South Korea prosecutes Terraform Labs co-founder Daniel Shin
[11]DoJ, Treasury accuses 3 men of laundering crypto for North Korea
[12]Ethereum co-founder Vitalik Buterin: If Musk's Twitter flops, it's not such a bad thing
[13]Chinese city of Changshu to issue salaries in digital yuan
With crypto enthusiasm [14]waning and sustainability on the rise, it was only a matter of time before such measures began to appear.
Anti-vaxxer and potential Democratic presidential candidate Robert F Kennedy Jr opposed the plan on [15]Twitter , arguing that the proposal was a "bad idea," and compared crypto's electricity usage to that of video games – which nobody proposes to ban.
The climate impact of gaming has drawn more [16]notice as the pastime grows, but overall has been difficult to quantify. A pre-COVID 2019 peer-reviewed study estimated that American gamers collectively used up to 34 terawatt-hours of electricity annually.
Information posted by the World Economic Forum [17]listed Bitcoin mining power usage at 62TWh per year as of 2020.
One segment of the tech industry that remains seriously carbon intensive is semiconductor production. However, given the current geopolitical environment and state of [18]Sino-US relations , restricting that activity would be considered a national security risk.
Notably, China was once a leader in cryptomining – particularly Bitcoin. That all changed when Beijing [19]banned cryptocurrency in 2021. The country has also heavily restricted [20]gaming for a number of years. ®
Get our [21]Tech Resources
[1] https://www.whitehouse.gov/cea/written-materials/2023/05/02/cost-of-cryptomining-dame-tax/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZFOCRKFeXhCobLZubbvTlAAAAJQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZFOCRKFeXhCobLZubbvTlAAAAJQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZFOCRKFeXhCobLZubbvTlAAAAJQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZFOCRKFeXhCobLZubbvTlAAAAJQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.nytimes.com/2023/04/09/business/bitcoin-mining-electricity-pollution.html
[7] https://www.theregister.com/2021/02/17/texas_blackouts_semiconductor_fabs/
[8] https://www.texastribune.org/2022/01/02/texas-winter-storm-final-death-toll-246/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZFOCRKFeXhCobLZubbvTlAAAAJQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2023/04/26/daniel_shin_prosecution/
[11] https://www.theregister.com/2023/04/26/doj_treasury_sanctions_north_korea/
[12] https://www.theregister.com/2022/11/03/vitalik_buterin_elom_musk_twitter/
[13] https://www.theregister.com/2023/04/26/changshu_digital_yuan/
[14] https://www.theregister.com/2022/12/23/crypto_craziness_craps_out/
[15] https://twitter.com/RobertKennedyJr/status/1653808949697687568
[16] https://www.bloomberg.com/news/articles/2022-12-17/what-is-the-environmental-impact-of-video-games#xj4y7vzkg?leadSource=uverify%20wall
[17] https://www.weforum.org/agenda/2022/03/crypto-energy-consumption/
[18] https://www.theregister.com/2023/04/21/taiwan_china_rhetoric/
[19] https://www.theregister.com/2022/02/25/china_cryptocurrency_illegal_fundraising_crime/
[20] https://www.theregister.com/2021/08/31/china_limits_kids_gaming_time/
[21] https://whitepapers.theregister.com/
30%?
100%. And immediately, not in a few years.
Cryptocoins BAD
Central Bank Digital Currency GOOD
How?
Wonder how they plan to distinguish cryptominers from normal datacenters.
Re: How?
Visually it's easy.
Mining is mostly set up where it will fit, no controlled environments, and the site is packed to the rafters with free-range GPUs and screaming ASICs, that you can hear from miles away.
Re: How?
If you have one GPU heating your basement, nobody will notice or care. Once you have a commercial operation, the authorities will take an interest not only in how much you earn, but also where the money comes from.
3.5bn over 10 years, that isn't a lot of money being raised.
I'd be interested to see the total world energy usage of cryptomining vs normal bit-barns. How much energy do netflix and all the other streaming consume?
The other implication of this is that energy prices are artificially low and do not reflect the true costs of generation.
Sometimes taxes are raised not to generate revenue, but to dissuade people from carrying out cetain activities.
I'm not sure that has ever worked and usually pushes people to find a bypass. Most things like this are just smoke and mirrors from govts trying to show that they are 'doing something' and never solve the root cause.
Check the number of smokers before and after Governments started ramping up taxes on tobacco...
And look at the rise of e-cigs as a bypass for that tax. Although I'm not sure that raising taxes was a direct causation for the generally falling rates of smoking. Realisation that you might die an early and nasty death did some of that work. But even after the ban in pubs etc you still see large groups huddled outside puffing away.
Has the sugar tax done anything to change eating and drinking habits? In certain areas of the US where specific cities or areas have introduced such a tax people just go out of town to buy their drinks.
Check the number of drinkers before and after the Governments started ramping up taxes on alchool...
It certainly caused a fair few pubs to close. But then we had the rise of cheap supermarket booze.
Why waiting for 3 years to reach the maximum tax level? What's the logic behind that?
You can see the logic in this when people are re-opening power stations just to serve as cryptocoin mining operations.
https://www.theguardian.com/technology/2022/feb/18/bitcoin-miners-revive-fossil-fuel-plant-co2-emissions-soared
I believe they now own the power station.
So the question then is how would this tax affect them? They are not buying electricity from the normal distribution network as they own the means of generation. So surely the tax does not apply?
Snake Oil
Crypto mining is just snake oil and should simply be banned.