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Uncle Sam’s Latest Move May Spell Trouble For Bitcoin Miners

source-logo  cryptoknowmics.com 04 May 2023 06:43, UTC

The government of the United States has been acting more aggressively against altcoins and Bitcoin (BTC). It is now about to kick things up a notch higher if a recently introduced bill is passed and this time Uncle Sam is going for the underlying technology.

U.S. Ponders Crypto Mining as Part of 2024 Spending Plan

The government was looking into crypto mining, according to a recent White House publication about the President's budget for 2024. The Digital Asset Mining Energy (DAME) Excise tax is a brand-new idea in the budget. As an environmental cost for the electricity used in crypto mining activities, the latter is expected to impose a 30% tax on crypto mining businesses. The goal of the tax was to get mining companies to pay for the effects that their activities had on the environment. However, a tax of this magnitude may actually be intended to subdue and harm the Bitcoin proof of work mining system. This is on the grounds that such a robust expense might compel most mining organizations in the U.S. bankrupt or push them to different purviews.

Impact Assessment of Bitcoin Miners and Hashrates

[embed]https://twitter.com/RichardHeartWin/status/1653659209102131208[/embed] According to reports, the DAME excise tax will target crypto-mining institutions. This implies Bitcoin's hash rate might drop fundamentally in the event that the new duty pushes such organizations to a corner, compelling them to end tasks. Alternatively, many of them might have to relocate their operations outside of the United States; individuals who are currently operating mining operations from their homes probably won't be affected. It is likely that Bitcoin's hash rate is strong enough to withstand a significant decrease. This is due to the fact that miners in other jurisdictions would fill in. Although the high tax would likely reduce mining profitability, revenue from mining would likely not be significantly affected. The effect would likewise rely upon crypto mining appeal. A new flood in Bitcoin ordinal engravings drove a flood in network movement. This accordingly prompted more excavator income and empowered more digger cooperation, subsequently pushing up the hash rate. To put it another way, just as it did when China outlawed Bitcoin mining, the hash rate of Bitcoin will eventually settle down.