It should be noted that cryptocurrency mining is now in serious demand. In particular, this week the Bitcoin network’s hash rate reached a record 480 hashes per second. This may indicate not only the growing popularity of BTC mining, but also a noticeable improvement in the computing equipment used for mining.

Despite this, the first cryptocurrency’s network is expected to see a decrease in mining complexity today. The figure is expected to drop by 1 per cent, marking its first decrease since mid-February 2023. The Bitcoin blockchain has gone through five consecutive increases in mining complexity, each of which set a record for the index.

For Etherium, which switched to the Proof-of-Stake algorithm in September 2022, this is no longer relevant, as the blockchain’s power consumption has dropped by more than 99 percent compared to its PoW version.

The day before, analysts at the Cambridge Centre for Alternative Finance conducted a study on the energy consumption of the Eth network. It turned out that a year of blockchain use is comparable to the consumption of 583 air conditioners over the same period of time. The same can be said for a 14.7 million mile journey in a Tesla Cybertruck.

Naturally, this is a very small figure for a global smart contract network.

What miners are being criticised for

Members of the Council of Economic Advisers have said that cryptocurrency miners harm society by contributing to pollution and increased greenhouse gas emissions. They are also one of the main causes of rising electricity tariffs. The agency believes that their proposed DAME tax would address the harmful environmental and social impacts of cryptocurrency mining. Here’s a relevant rejoinder on the subject.

The high energy consumption of cryptominers negatively affects the environment, quality of life and power grids in the locations of these companies across the country.

As a reminder, in April 2023, representatives of the Environmental Working Group also accused the miners of polluting the environment. And they focused not only on the use of "dirty" varieties of fuel for power generation, but also on the constant noise from ASIC-mainers. As experts then noted, it interferes with the lives of ordinary people who live near such mining stations.

The fight against mining is gradually taking on a political context in the United States. Fortunately, the innovation has powerful allies. In particular, during a recent Senate hearing, Senator Cynthia Lummis stated that environmental standards should not be used to restrict miners’ activities.

According to CryptoSlate sources, Dennis Porter, CEO of the non-profit Satoshi Action Fund, called the action of the US President’s office “discrimination against miners”. According to him, passing the bill would only have one consequence – an exodus of mining companies to other countries.

Imagine if we had imposed a 30 per cent tax on internet companies in the 90s. That would have provided all the jobs and economic growth outside the US.

And that's a pretty logical assumption. Certainly, many miners choose the US because of adequate enforcement of laws and possible protection of their interests in court. However, if it comes to having to give up a third of their earnings, the situation could indeed lead to a relocation. Still, the big cryptocurrency mining players will surely have the money to both research other jurisdictions and take the equipment out and then install it.

The departure of mining companies from the US in the event of a negative outcome is a very realistic scenario. For example, in 2021 Bitcoin mining was banned in China, which retained the lead in terms of hash rate globally before such regulations were adopted. Moreover, after the Chinese government’s crackdown, many local miners moved to the U.S., and now America is the leader in the field. However, judging by the current problems of blockchain companies, the situation could change.

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In addition to miners, Ripple, which issues the XRP token, has long been under the yoke of the US Securities and Exchange Commission (SEC). The day before, CryptoLaw founder and Ripple lawyer John Deaton reported that the SEC is using the ambiguity in cryptocurrency regulation to interpret the Howey test in its own way.

As a reminder, the Howey test is a set of criteria under which an asset is defined as a security. Recently, the Commission has been imputing unregistered distribution of securities to many cryptocurrencies, de facto recognising most digital assets on the market as such. The only way to do this in fact, though, is through a court of law.

The SEC’s “self-dealing” has already led to the management of Coinbase, the largest US exchange, considering relocating its core business to other countries. Deaton believes the Commission is openly hurting the industry. Here’s his rejoinder.

The SEC, led by Chairman Gary Gensler, has its own idea of how cryptocurrencies should be regulated today, but the regulator’s actions are so radical that they are worthy of a separate lawsuit.

Deaton noted that when the SEC originally filed the lawsuit against Ripple, he expected the regulator to point to certain instances of XRP distribution that potentially failed the Howey test. However, the suit argued that every sale of XRP ever made constituted an illegal distribution of securities. This claim is based on the argument that the “very nature” of XRP is that the cryptocurrency belongs in the category of securities. It continues.

This SEC argument goes beyond the Securities Act of 1933 and more than 250 federal appellate and Supreme Court decisions on securities law.

And while the SEC chairman’s actions have previously been criticised even in the highest circles of the US government, the Commission continues its short-sighted policy. Perhaps this will eventually change for the better, because a different outcome would be detrimental to the US market.


We believe that what is happening is really not good for the reputation of the US as a place to launch cryptocurrency start-ups or just to conduct such activities. And if a tax on mining does get imposed, it will very likely lead to an exodus of entrepreneurs from the country. And in the long run, it could end up with the loss of the government's leadership position in the financial sector.


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