Bitcoin mining

Texas Senate committee moves forward on bill removing incentives for crypto miners

Under the proposed legislation, certain crypto mining firms participating in a program to reduce the load on Texas’ energy grid would not receive an abatement on state taxes.

The Texas Senate Committee on Business and Commerce has passed legislation that would largely remove incentives for miners operating under the state’s crypto-friendly regulatory environment. 

In an April 4 session of the committee, Texas lawmakers agreed to move forward in a 10-0 vote on Senate Bill 1751 first introduced by state Senator Lois Kolkhorst. The proposed legislation would amend sections of Texas’ utilities and tax code to add restrictions for crypto mining facilities.

Under the bill, crypto firms participating in a program intended to compensate them for load reductions on Texas’ power grid would be capped for anticipated demand of “less than 10 percent of the total load required by all loads in the program.” Certain crypto mining companies would also not receive an abatement on state taxes for participation in the program starting in September.

According to Bitcoin (BTC) mining advocate Dennis Porter, the CEO of the Satoshi Action Fund, the changes to the state’s code would effectively eliminate incentives for crypto miners to create jobs in rural parts of Texas. He claimed that lawmakers on the committee had been “swayed by the influence of the powerful bill sponsor” — likely referring to Senator Kolkhorst.

Related: Bitcoin mining advocate is going state-to-state to educate US lawmakers

Texas has become somewhat of a beacon for crypto miners due to its seemingly loose regulatory regime and in the wake of the practice being largely banned in China. Crypto has been recognized as part of the state’s commercial code since 2021, and Governor Greg Abbott — re-elected to another four-year term in November — has previously referred to himself as a “crypto law proposal supporter” in the state.

Senate Bill 1751 will likely next move to the Texas state Senate for a floor vote.

Magazine: Crypto City: Guide to Austin

MIT Space Force major proposes Bitcoin mining as cybersecurity tool

An active-duty United States Space Force astronautical engineer is proposing a new cybersecurity tool to the Pentagon: Bitcoin.

An active-duty United States Space Force astronautical engineer is proposing a cybersecurity tool to the Pentagon that is capable of transforming the country’s national security and the base-layer architecture of the internet: Bitcoin (BTC).

In an academic thesis, Major Jason Lowery, who is also a national defense fellow at Massachusetts Institute of Technology (MIT), presented a new theory to the U.S. Department of Defense that Bitcoin is not just a peer-to-peer payment system but a new form of “digital-age warfare,” arguing that proof-of-work technologies will change the way humans compete globally, according to Ben Schreckinger’s review of the book in Politico.

Published in February, Lowery’s master’s degree thesis dubbed “Softwar” sits in third position on Amazon’s list of best-selling technology books at the time of writing. According to his Amazon bio, Lowery has a decade of experience serving as a weapon system developer and technical adviser for U.S. senior officials, including Bitcoin-related policies.

Related: Proof-of-Work, Explained

Lowery’s research argues that the U.S. military could use Bitcoin to stop certain types of attacks, such as denial-of-service attacks, which overload servers with too many requests. The concept involves creating software programs that only respond to signals from large transactions recorded on the Bitcoin network. This would make it harder for attackers to flood servers with fake signals and cause damage.

Lowery also suggests that the Bitcoin network is like maritime trade routes, which means it’s suited for economic exchange. Consequently, it’s crucial to protect freedom of navigation on the network, just as we protect trade routes.

By designing software programs that only respond to external signals if they come with a large enough Bitcoin transaction recorded on the network, Lowery argues they would prevent adversaries from gaining control over them.

According to the author, the U.S. should also stockpile Bitcoin, build a domestic Bitcoin mining industry and extend legal protections to the technology. In his view, Bitcoin is a self-defense weapon, and the country should protect it as it does other rights.

Magazine: Can Bitcoin survive a Carrington Event knocking out the grid?

Africa: The next hub for Bitcoin, crypto adoption and venture capital?

Cointelegraph’s Elisha Owusu Akyaw shares how cryptocurrency is changing the financial landscape in Africa — and the opportunities and challenges that come with it.

The cryptocurrency space has no shortage of skeptics. While many people criticize the environmental impact of proof-of-work blockchains or the proliferation of scams, one particular argument against crypto often stands out: Blockchain has no real use cases. 

Every two weeks, Cointelegraph’s The Agenda podcast breaks down this critique and explores the various ways blockchain and crypto can help everyday people.

On this week’s episode of The Agenda, hosts Jonathan DeYoung and Ray Salmond chat with Elisha Owusu Akyaw, Cointelegraph’s own social media specialist and host of the Hashing It Out podcast, to break down how Africans are using crypto to strengthen financial inclusivity and potentially turn countries into hubs of technological innovation.

How crypto is helping everyday Africans

According to Akyaw, crypto offers a more convenient, affordable way to send money both regionally and around the world. “Western Union, MoneyGram and all of these money transaction firms or rails have made millions from Africa for so long” by charging high fees, said Akyaw, whereas the cost required to send money via crypto is significantly lower.

Bitcoin (BTC) also offers a better store of value for most Africans than local fiat currencies, Akyaw argued. Speaking on his own experience of living in Ghana, he said that “you can buy Bitcoin and keep it for the next one year or six months. It’s a better hedge against inflation than keeping the Ghanaian cedi.”

Finally, the crypto industry is opening up new opportunities on the continent. “At every point of development, Africa has been left behind,” said Akyaw. But the global nature of the industry and the fact that it’s still in its early development present a unique opportunity to participate and benefit from its growth.

“This is one of the first times where there is a big shift happening and Africans are able to contribute. Africans are able to benefit directly from the shift that is happening without it having to pass through an intermediary, which is usually the state. And I think it’s an amazing thing.”

The next Silicon Valley?

When asked about what it would take for countries in Africa to become “magnets for crypto builders or a new kind of Silicon Valley,” Akyaw pointed to two factors that need to be improved for developers, startups and fintech companies to want to make the continent their home: regulation and infrastructure.

The majority of African countries lack proper regulation, according to Akyaw, while also condemning the use of crypto. This means companies are often unable to obtain licenses to set up shop and residents are dissuaded from interacting with Web3 protocols and firms:

“You can’t get a license. You can’t work with a bank in the country. You can’t do a lot of things. So, it makes no sense for you to come in.”

The other thing that needs to change, said Akyaw, is that electric grids need to be more stable and internet needs to be more reliable. “If you want a lot of Big Tech companies to come in, they must have great, 24/7 electricity. Internet must be awesome because a lot of what we do in the crypto space is virtual.”

To hear more from Akyaw’s conversation with The Agenda — including his backstory, whether outside funding has any negatives and the potential near-term future of crypto in Africa — listen to the full episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Greenpeace war on Bitcoin unintentionally spawns ‘badass’ new mascot

Greenpeace’s “Skull of Satoshi” artwork highlights their gripes with Bitcoin’s consensus mechanism, but Bitcoin supporters adopted it as a new mascot.

Environmental group Greenpeace’s latest salvo against Bitcoin (BTC) is commissioning artwork to highlight its climate impact. Instead, the art piece has been widely praised by Bitcoiners, who want to adopt it as its mascot.

On March 23, the climate activism group partnered with art activist Benjamin Von Wong for its ongoing “change the code, not the climate” campaign to convert Bitcoin’s consensus mechanism to a proof-of-stake (PoS) model.

Greenpeace revealed its art piece dubbed the “Skull of Satoshi” — an 11 feet (3.3 meters) tall skull featuring the Bitcoin logo and red laser eyes — a popular meme adopted by Bitcoin supporters.

“Smoking stacks” sit atop the skull, which is made of recycled electronic waste, supposedly to represent the “fossil fuel and coal pollution” caused by Bitcoin mining and the “millions of computers” used to validate network transactions.

Greenpeace’s marketing efforts took an unexpected turn when Bitcoin supporters expressed admiration for the art piece, with some already adopting it as a quasi-mascot.

Will Foxley, the media strategy director at crypto miner Compass Mining, called the art piece “badass” and changed his Twitter profile picture to an image of the Skull of Satoshi.

Coin Metrics co-founder Nic Carter tweeted on March 24 that the art is the “most metal Bitcoin artwork to date.”

Related: Eager to work: Bitcoin switch to proof-of-stake remains unlikely

Meanwhile, others picked apart the imagery Greenpeace chose, with one Twitter user saying the smokestacks on the skulls head resembled nuclear cooling towers emitting steam.

Greenpeace’s campaign was launched around a year ago alongside other climate groups and Ripple co-founder Chris Larsen.

It aims to pressure Bitcoin developers, miners and the government, and claims 30 “key” entities could move Bitcoin from proof-of-work if they agreed to the change.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Texas lawmaker introduces resolution to protect Bitcoin miners and HODLers

The Lone Star State is already home to many crypto and blockchain firms as well as miners taking advantage of the regulatory-friendly environment.

Cody Harris, a member of the Texas House of Representatives, has introduced a resolution aiming to have the legislature say the “Bitcoin economy is welcome” in the state.

In a resolution released on March 21, Harris encourages Texas lawmakers to “express support for protecting individuals who code or develop on the Bitcoin network” as well as miners and Bitcoiners operating in the Lone Star State. The state representative added that Texas’ constitutional rights concerning “all unreasonable seizures or searches” should extend to attempts to go over residents’ digital asset holdings.

“Individuals who mine Bitcoin in Texas will never be inhibited by any law or resolution that restricts the practice of securing the Bitcoin network for the safety of the virtual currency,” said the resolution. “All those in the broader community who choose to own Bitcoin as a manner of storing their wealth and transacting peer-to-peer with other law-abiding Texas citizens shall always feel free and safe in their ownership and use of Bitcoin.”

House Concurrent Resolution 89, if adopted, would largely not apply to Texas’ laws and regulations, but rather express a certain sentiment among lawmakers. The resolution cited the Chinese government’s crackdown on crypto miners, a move that drove many firms to Texas. Riot Platforms, Core Scientific and White Rock Management are among some of the firms to set up operations in the Lone Star State.

Under the state’s commercial laws, cryptocurrencies are recognized as part of an amendment to Texas’ Uniform Commercial Code. However, some lawmakers at the federal level have criticized Texas’ seemingly loose regulatory regime for the potential environmental impact caused by the energy consumption of mining firms.

Related: Bitcoin mining advocate is going state-to-state to educate US lawmakers

Texas Governor Greg Abbott, reelected to another four-year term in November 2022, has previously referred to himself as a “crypto law proposal supporter” in the state. According to Florida Governor Ron DeSantis, Texas was considering a ban on central bank digital currencies, both foreign and domestic, following a similar initiative announced by his office on March 20.

Solo Bitcoin miner defies odds to mine valid BTC block, gets $150K block reward

Mining a valid BTC block solo is so rare that the event has occurred only 270 times out of the 700,000 blocks produced in the last 13 years.

A solo Bitcoin miner has managed to mine the 780,112th block in the Bitcoin blockchain, receiving a 6.25 Bitcoin (BTC) block reward in return. The estimated value of the payout is over $150,000.

The solo miner was also lucky to have produced a valid hash after just two days of mining, as the event itself is rare, and it can take months for a solo miner to produce a valid hash.

The rare event occurred on March 10 and was the 270th solo mined block in Bitcoin’s 13-year-long history. The event is rare because a solo miner of this size usually solves a block, on average, about once every 10 months.

The miner created a solo mining pool using the Solo CK Pool mining service, for which they produced a valid block hash and were rewarded with 6.25 BTC, with a fee reward of roughly 0.63 BTC.

Con Kolivas, the Solo CK mining pool admin, noted that the miner behind the rare event might have temporarily rented hashing power to produce the output hash.

Solo Bitcoin miner’s output hash.  Source: BTC explorer

Bitcoin mining requires miners to input computational power to solve and add the next Bitcoin block to the network. However, with the growing popularity of BTC mining and the constant rise in the network hash rate and powerful mining machines, it’s near impossible for a solo miner to solve the whole block on their own.

Related: How to mine Bitcoin: A beginners guide to mine BTC

Thus, a valid block hash is often produced using the computational power of multiple mining rigs, all trying to mine the next block. The block reward is distributed according to the input hash rate of each miner in the mining pool.

The Solo CK mining pool has been behind several solo-mined Bitcoin blocks in the past as well. Two of these solo-mined blocks came in January 2022, only two weeks apart, with the first occurring on Jan. 11, 2022, at a block height of 718,124, followed by another on Jan. 24, at a block height of 720,175.

Crypto Biz: Silvergate shutting down, Alameda suing Grayscale

Negative headlines surrounding Silvergate dragged Bitcoin’s price below $20,000. Meanwhile, bankrupt Alameda is planning to sue Grayscale and its parent company DCG.

With the Bitcoin (BTC) halving more than a year away, don’t expect crypto industry narratives to change anytime soon. Nay, crypto winter is still in full force, and the nasty headlines show no signs of abating. 

This week, Silvergate Bank’s parent company announced it would shut down and liquidate the crypto bank “in light of recent industry and regulatory developments.” This hardly comes as a surprise after most of Silvergate’s high-profile partners abandoned the company when the regulators came knocking.

The latest Crypto Biz newsletter documents the voluntary liquidation of Silvergate, a new lawsuit from Alameda Research targeting the Digital Currency Group (DCG), and “stale” Tether allegations from The Wall Street Journal.

Silvergate Capital Corporation will ‘voluntarily liquidate’ Silvergate Bank

After months of uncertainty, Silvergate Bank’s parent company announced on March 8 that it would unwind its operations and liquidate its remaining assets. While this marked another blow to the crypto industry, the writing was already on the wall for Silvergate Bank. According to reports, Silvergate Bank had been negotiating with the Federal Deposit Insurance Corporation (FDIC) to avoid a shutdown. Apparently, those talks went nowhere. Like other crypto firms, Silvergate’s troubles began with the meltdown of FTX and ended with regulators investigating the bank’s alleged involvement in Sam Bankman-Fried’s doomed empire. By the time Silvergate went under, companies like Coinbase, Paxos, Gemini, Galaxy Digital and BitStamp had already cut ties.

Alameda Research files suit against Grayscale over ‘self-imposed redemption ban’

Here’s a headline you probably weren’t expecting: Bankrupt Alameda Research is suing Grayscale Investments and its owner, the Digital Currency Group, for its exorbitant fees and refusal to unlock shareholder redemptions. The lawsuit, filed in Delaware, alleges that Grayscale charged over $1.3 billion in management fees, supposedly violating trust agreements. The company also “contrived excuses” to prevent shareholders from redeeming their shares. The lawsuit seeks to “unlock $9 billion or more in value for shareholders of the Grayscale Bitcoin and Ethereum Trusts […] and realize over a quarter billion dollars in asset value for the FTX Debtors’ customers and creditors.” These sorts of allegations against DCG and Grayscale are nothing new. In January, Bitcoin billionaire Cameron Winklevoss accused DCG CEO Barry Silbert of orchestrating “a carefully crafted campaign of lies” to hide a hole in an associated company’s balance sheet.

Bitcoin ASIC manufacturer Canaan saw 82% revenue drop in Q4

In another sign of the times, Chinese Bitcoin miner and manufacturer Canaan reported a massive drop in revenue during the fourth quarter. The company’s sales plummeted 82.1% year-over-year to $56.8 million. During the quarter, Canaan sold 1.9 million terahashes per second worth of computer power for Bitcoin miners, down 75.8% compared to a year ago. Regarding profitability, Canaan was deeply in the red for the quarter — reporting a loss of $63.6 million. Overall, Canaan appears healthy enough to withstand a crypto winter that could last for the rest of the year. The company currently has $706 million in total assets against $67 million in liabilities.

Tether strikes at WSJ over ‘stale allegations’ of faked documents for bank accounts

Here’s how you know the bear market isn’t over: Mainstream media’s attacks against stablecoin issuer Tether show no signs of letting up. If you’ve been in crypto long enough, you know that Tether is the industry’s favorite conspiracy theory because people love to doubt the company’s collateral, the make-up of its reserve holdings and its association with crypto exchange Bitfinex. This week, a familiar Tether foe alleged that the stablecoin issuer faked documents and used shell companies to access the banking system. According to The Wall Street Journal, Tether and Bitfinex faked sales invoices and transactions as part of a ploy to open bank accounts. On the same day the report was released, Tether fired back, claiming the story was based on “stale allegations from long ago,” and “wholly inaccurate and misleading.”

Before you go: How will the Silvergate implosion impact crypto?

The fallout from the FTX collapse continues to impact crypto markets. Now, crypto-friendly lender Silvergate Bank is on the brink of insolvency after reporting a $1 billion net loss in the fourth quarter. That’s not the worst of it, though. Several major crypto companies, including Coinbase, Circle, Paxos, Galaxy Digital, MicroStrategy and Tether, have distanced themselves from the company as the United States Department of Justice investigates its involvement in the FTX debacle. On this week’s Market Report, I sat down with fellow analysts Marcel Pechman and Joe Hall to discuss how Silvergate could impact crypto sentiment. You can watch the full replay below.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.

Argo increases Bitcoin production despite BTC difficulty growth

Argo’s daily Bitcoin production rate in February surged 7% despite a 10% month-over-month increase in average network difficulty.

Publicly-listed Bitcoin (BTC) mining firm Argo Blockchain has increased its daily BTC production despite a significant spike in network difficulty.

During February, Argo mined 162 Bitcoin or BTC equivalents, translating to 5.7 BTC per day, which the firm announced in an operational update on March 7.

Argo’s daily Bitcoin production rate in February surged 7% from 5.4 BTC per day produced in January, despite a 10% month-over-month increase in average network difficulty.

Bitcoin mining difficulty is a measure defining how hard it is to mine a BTC block. A higher difficulty requires more hash rate or additional computing power to verify transactions and mine new coins.

According to data from Blockchain.com, BTC network difficulty surged to new all-time highs in February, hitting a difficulty rate of 43 trillion on Feb. 25.

Bitcoin difficulty historical chart. Source: Blockchain.com

The news comes amid the industry anticipating the next Bitcoin difficulty adjustment expected to occur on March 10. According to data from BTC.com, the next difficulty is estimated to reach 43.4 trillion.

Related: Argo Blockchain accused of misleading investors in class-action lawsuit

As previously reported, Argo Blockchain sold its flagship mining facility Helios to Mike Novogratz’s crypto investment firm Galaxy Digital amid the tough crypto market of 2022. Despite continuing to mine using Galaxy’s facility, Argo saw its BTC production drop after the sale. Months before the transaction, Argo’s monthly BTC mining generated more than 200 BTC.

Argo is not the only mining firm that seems unaffected by the BTC difficulty spike in February, with other miners like Cipher Mining producing 16% more Bitcoin over January. Marathon Digital also increased its average daily Bitcoin produced by 10% compared to January.

On the other hand, Hut 8 mining firm saw its daily Bitcoin production rate dropping from 6 BTC in January to 5.6 BTC in February.

TeraWulf goes nuclear: 8,000 rigs spool up in Nautilus mining facility

Bitcoin mining company TeraWulf has fired up a new “behind the meter” mining facility powered by 100% nuclear power in Pennsylvania.

United States-based Bitcoin mining company TeraWulf has fired up a new crypto mining facility in Pennsylvania — solely running on nuclear power generated on-site. 

In March 6 statement, TeraWulf said the Nautilus Cryptomine facility is its first “behind the meter” Bitcoin (BTC) mining facility, meaning it uses energy directly at the generation site without traveling through the grid.

The Nautilus Cryptomine directly sources carbon-free baseload power from the 2.5 gigawatt (GW) Susquehanna nuclear generation station on site.

Paul Prager, chairman and CEO of TeraWulf, claims the Nautilus mining facility now has “arguably the lowest cost power in the sector, just $0.02/kWh for a term of five years.”

The company also revealed they have now brought online nearly 8,000 mining rigs representing computing power, or hash rate, of 1.0 exahashes per second (EH/s), with plans for another 8,000 miners by May, increasing the hash rate to 1.9 EH/s.

TeraWulf has a 50 megawatt (MW) share in phase one of the new facility, a joint venture with Cumulus Coin, but can add an additional 50 MW of BTC mining capacity in future phases.

According to TeraWulf’s website, the Nautilus Cryptomine is expected to reach 300 MW when complete and will be among the largest mines in North America.

The Nautilus Cryptomine facility in Pennsylvania is solely nuclear powered. Source: TeraWulf

First announced back in August 2021, the Nautilus Cryptomine facility is the result of a partnership between TeraWulf’s nuclear mining facility subsidiary and power generation and infrastructure company Talen Energy Corporation. 

Phase 1 of the joint venture included the 180-MW “Nautilus Cryptomine” built on Talen’s digital infrastructure campus adjacent to its nuclear power generation station.

TeraWulf generates domestically produced BTC powered by nuclear, hydro, and solar energy with a goal of utilizing 100% zero-carbon energy.

Related: US legislators renew call for EPA investigation of crypto mining emissions data

Concerns around the potential environmental impacts of BTC mining have ramped up in the last few years with heated debates around the environmental and energy impact surrounding the mining of crypto assets. 

Last year, New York signed a two-year moratorium banning any new fossil-fuel-powered Bitcoin miners from setting up shop within the state.

Last October, Europe made moves toward regulatory action on crypto’s alleged environmental impact as well.

Montana’s ‘right to mine’ crypto bill moves closer to passing as law

The bill seeks to enshrine crypto miners’ rights and will still have to pass muster in the states House before its signed into law by the governor.

A cryptocurrency mining rights bill with laws that would prohibit the discrimination of crypto miners is one step closer to fruition after passing the Montana Senate.

The proposed laws would enshrine a “right to mine digital assets” and would prohibit “discriminatory” electricity rates being charged to crypto miners, protect mining that occurs “at home” and strip local governments of the power to use zoning laws to stop crypto mining operations.

It also prohibits additional taxes on the use of crypto as a payment method and would consider “digital assets,” including cryptocurrencies and nonfungible tokens, as “personal property” alongside other financial products such as stocks and bonds.

The bill was passed in the state Senate on Feb. 23 with a vote of 37 for and 13 against and will head to the House for approval. If it is passed there as well, the final step would be for it to be signed into law by Governor Greg Gianforte, who could also choose to veto the bill.

Text from the bill outlining its provisions and some of the reasoning for the laws. Source: Montana State Legislature

The bill outlined that Montana wants to “protect the right to mine” crypto and “create legal certainty” for miners as mining “provides positive economic value” and could potentially “stabilize the grid and provide revenue for infrastructure upgrades.”

The bill was written with the help of the Satoshi Action Fund, a pro-Bitcoin (BTC) lobbying group.

Related: Hut 8 CEO weighs in on the bull and bear markets from a mining perspective

Dennis Porter, CEO of the advocacy body, told Cointelegraph in a January interview that leaders in Montana have used zoning laws to attempt to push miners out and have considered imposing higher electricity rates on miner operations.

In April 2019, Missoula County in Montana passed rules that required miners to operate only in light and heavy industrial districts and required miners to exclusively use renewable energy. If passed, the law would overturn the county’s zoning ordinance.

In early February, the Mississippi state Senate passed a similar bill seeking to protect crypto miners from discrimination and is working its way to the states House.

Meanwhile, Missouri’s Digital Asset Mining Protection Act, which aims to protect the rights of crypto miners, was introduced to the state legislature in mid-January.