Bitcoin Mining Regulations in the U.S.
Cryptocurrency mining is the process of using computing power to verify transactions on a blockchain network and earning cryptocurrency for providing that service.
Cryptocurrency mining is the process of using computing power to verify transactions on a blockchain network and earning cryptocurrency for providing that service. At the time of this writing, there are no laws banning cryptocurrency mining in the United States. There are also no federal laws that cement its legality nationwide. However, some states have taken steps to regulate cryptocurrency mining in the United States.
Arizona H.B. 2602, which has become Arizona state law, states that cities and towns cannot prohibit individuals from running nodes on blockchain technology in their residences. Miners running full or partial nodes are protected when validating blocks, confirming transactions, and earning block rewards.
Under the supervision of the New York State Department of Financial Services (NYDFS), New York State requires regulatory permissions to operate many types of cryptocurrency businesses. However, neither a Bitlicense nor a New York Trust Charter is required for cryptocurrency mining. This allows a much greater number of people to have the opportunity to mine cryptocurrencies, beyond just financial institutions.
In 2017, when the value of bitcoin hit $3,000 for the first time, Montana Governor Steve Bullock used $416,000 in grant money to help fund Project Spokane, a large bitcoin mining project. In 2018, a Canadian company called Hyperblock purchased the operation. Hyperblock shut it down in May 2020 after a volatile period for bitcoin.
As the price of bitcoin increased in 2017, crypto miners looked for the least expensive electricity costs they could find to keep mining costs down and increase profit margins. At the time, Washington State had some of the lowest electricity costs in the country, so many bitcoin miners flocked there. However, when their activities began to overwhelm local energy grids, the state created a higher cost electricity tier for some.
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