The crypto industry has faced a gauntlet of challenges, and it seems like the ordeal is not yet over. The Biden administration aims to add a thirty percent tax on electricity consumed by crypto miners. This new measure is supposed to minimize crypto mining’s impact on climate change. But presidential candidate Robert F. Kennedy Jr. is opposed to the new tax proposal.
Kennedy cites that imposing an additional 30% tax on crypto mining is a bad idea, and it will just drive innovation outside the United States. He further defended cryptocurrencies by saying that they are the drivers of innovation.
Proof-of-Work Crypto Will Be Most Affected
Bitcoin and some cryptocurrencies rely on Proof-of-Work (PoW) to secure and validate the network. PoW requires participants to solve complex mathematical puzzles by using their mining rigs. The first miner who solves the puzzle gets to add a new block of transactions to the blockchain and receive a reward. This process makes it hard for anyone to cheat or tamper with the blockchain because they would need more computing power than all the other miners combined.
The Whitehouse is saying that crypto mining rigs’ power consumption has a negative impact on the environment. It is true that mining crypto, like Bitcoin, consumes a lot of energy, but a recent study has proven that the majority of it is from green or sustainable sources. The chart below shows Bitcoin’s power sources.
Kennedy Believes Crypto is an Escape from Collapse
Kennedy has always been a vocal advocate of crypto. Previously he stated in a tweet that cryptocurrencies like Bitcoin are an escape from disaster. He also sounded the alarm regarding the negative implications once the U.S. rolls out a Central Bank Digital Currency (CBDC). In the same tweet, he also described how the executive branch weaponized government agencies to force crypto-friendly banks to stop doing business with digital assets companies.
How Long Will the Siege Last?
The government’s siege against the crypto industry is relentless, but the space is thriving and going strong. They tried to de-bank the whole industry, but it seems like their strategy backfired. Bitcoin price rallied after banks started to implode. Digital assets that are being described as too risky are now being seen as havens. Even members of Congress are questioning the hostile stance taken by overreaching regulators. Lawmakers are worried that capital is being pushed out of the country, while retail investors are being excluded from participating in an emerging market.
The hard facts show us that Bitcoin and crypto are not hurting the environment and Kennedy is right when he opposed the proposed extra tax for crypto miners. PoW mining is already getting the majority of its electricity from renewables and this will get better as the world shifts to more sustainable energy sources. Maybe they should also consider that mining “digital gold” does not require destroying mountains just to get precious metals.
Featured Image from Pixabay
