The Montana Senate has recently passed a bill aimed at protecting cryptocurrency miners operating in the state. The bill, which is currently being processed in the state House of Representatives, he seeks to protect individual and commercial Montana miners from discriminatory laws, eliminating some of the rules that could harm their operations.
Specifically, the bill aims to protect miners against taxes on digital assets used as a means of payment. In addition, it strives to allow home cryptocurrency miners to use less than 1 megawatt of power per year, except where it contravenes existing noise ordinances.
In addition, it aims to end any classification of energy tariffs that discriminates against domestic cryptocurrency mining and digital asset companies.
The bill follows 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 developments earlier this week. Your nonprofit organization helps shape policy related providing legislators and regulators with data that underline the benefits of Bitcoin mining.
“Montana has very high wind potential. It ranks fifth according to the 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,” he said. Porter told Cointelegraph. “Mining helps solve this problem because it can be an early buyer of that energy. Montana generally has a hard time exporting its energy because of its remoteness. Now the state can bring in customers [mineros de Bitcoin] to them instead.”
Porter claims that there are two “major factors” holding back the US crypto mining industry: “The first is the misconception that mining is bad for the network or the environment. In fact, mining is a powerful tool to balance the grid and clean up the environment.”
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 gave the concept of network equilibrium as an example.
“Mining thrives in states that have balance-of-grid programs,” he explains. “These programs pay participants to reduce their energy use when prices rise or there is a shortage of supply. Miners are ideally suited to participate in these types of programs because they can reduce their energy use by pressing a button at any time of the day “.
How Montana Benefits
Proponents of the bill believe that with 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 to Cointelegraph, Montana Senator Daniel Zolnikov, the bill’s main proponent, said the region has a lot to gain by embracing the digital asset sector. He explained that by allowing cryptocurrency mining operations to run without restrictions, Montana could attract more companies and investment from the broader cryptocurrency industry:
“I hope that if my legislation becomes law, Montana will attract more digital asset miners who will invest in many of the rural communities, creating jobs where they are needed most.”
“I hope this also serves as a signal to the broader digital asset industry that Montana welcomes its innovation, as well as the arrival of innovative new companies in our State,” he added.
Concern over the sustainability of cryptocurrency mining
Not everyone shares Zolnikov’s optimism about the effect crypto mining could have on small towns and communities.
Although the influx of cryptocurrency miners may lead to a short-term uptick in development, Colin Read, a former mayor of Plattsburgh, New York, and a SUNY economics professor, said mining companies generally don’t deliver on their promises to create Job positions. In 2021, stated to CNBC:
“Counties and cities are seduced by all these promises of job creation, which – when investigated, and I have – just don’t come true.”
It is also likely to cause an influx of cryptocurrency mining companies, which could raise energy and sustainability issues.
New York State, for example, has had to deal with related issues since 2018, when it saw a rise in cryptocurrency 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 tariffs for cryptocurrency miners in order to curb the problem.
Sustainable energy supply issues have also arisen in states such as Texas, where a considerable number of cryptocurrency mining companies have been established.
Power grids often experience overload problems during periods of extreme weather conditions, such as heat waves or snow storms. This is because the general public tends to turn on the air conditioning at such times, which causes a network overload. At times, Texas miners have been forced to disconnect their systems to relieve pressure on the network.
There are more examples in Montana itself. Missoula County, in response to concerns about energy consumption and pollution, has required cryptocurrency mining companies to consume or generate enough renewable energy to power 100% of their operations.
Montana experiences high energy demanding weather conditions. The summer heat can get over sometimes 100 degrees Fahrenheit (nearly 38 degrees Celsius), and arctic gusts in winter can bring 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 about the ecological impact of cryptocurrency mining, several US states have enacted laws limiting these energy-intensive activities. Laws often place limits on energy use or restrict the type of energy sources that can be used.
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 increasing pressure from environmental groups. Similar issues are likely to arise in Montana if its crypto mining bill passes.
Zolnikov addressed some of the sustainability concerns, stating: “Montana already has an energy mix that makes it attractive to the digital asset mining industry, and my intent with the introduction and hopeful passage of this legislation is to provide legal certainty. digital asset miners to keep operating in the state for the long term.”
Montana currently has a wide variety of geothermal, wind, solar, and hydro power sources. The Missouri River, the longest in the United States, flows from western Montana, and its tributaries are also used for generate hydroelectric power.
A delicate bill that seeks to bring balance
Montana’s pro-cryptocurrency mining bill is meant to encourage more cryptocurrency miners to establish their facilities in the state. Although its passage is expected to bring some positive transformations to Montana, some teething problems are expected, especially related to green and sustainable energy.
Today, the state has a wide range of 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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