The White House is pleading with Congress to add a 30% tax on the power used in cryptocurrency mining in the 2019 federal budget in order to decrease the impact of the burgeoning industry on climate change. In his budget proposal for the fiscal year 2024, US President Joe Biden suggested a new tax on Bitcoin mining.
Businesses that participate in cryptocurrency mining—the process of producing new currencies by figuring out complicated cryptographic riddles and confirming transactions—will be subject to the Digital Asset Mining Energy (DAME) excise tax. The levy will amount to 30% of what it costs to mine bitcoins.
The enormous energy requirements of cryptocurrency mining have a detrimental effect on the environment, electrical grids, and the local communities where these companies are based. The DAME tax aims to force cryptocurrency miners to shoulder their fair share of societal costs, such as those incurred due to local environmental deterioration, rising energy costs, and increased greenhouse gas emissions.
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Even when cryptocurrency miners use cutting-edge, clean power, mining has an impact on the environment. Crypto miners are using a growing quantity of electricity, which limits the amount of clean power accessible for other uses. This drives up costs and shifts attention more generally to dirty electricity sources.
Over a ten-year period, the DAME tax is anticipated to generate $3.5 billion in revenue. Vice President Biden’s administration, for instance, has taken action to address climate change, control energy costs, and guarantee the ethical development of digital assets.
The DAME tax aims to guarantee that miners pay their fair share of the costs they place on society as well as to cut down on the financial and environmental costs associated with current crypto-mining practices.
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Given that other countries are also taking steps to restrict crypto mining, a national strategy is needed to stop it from simply spreading from one local community to another. Other energy-intensive industries, like the manufacture of chemicals and steel, are, of course, exempt from an electricity consumption tax.
The White House counters that cryptocurrency mining doesn’t necessarily result in the same benefits as those other economic sectors, including as the creation of jobs and the provision of essentials. Furthermore you can find out the complete details of the Bitcoin halving dates.
The financial system may be at risk due to the price volatility of cryptocurrencies, where one bitcoin’s worth has ranged between $15,000 and $40,000 in the previous year.