The second factor hindering mining in the United States, according to the exec, is regulatory policies that apply to mining that fail to take into account some of its positive aspects. He highlighted the concept of grid balancing as an example.<\/p>\n
\u201cMining thrives in states which have grid balancing programs,\u201d he explained. \u201cThese programs pay participants to turn down their power consumption when power prices spike or there is a lack of supply. Miners are well suited for participating in these types of programs because mining can reduce its power consumption at the click of a button during any hour of the day.\u201d <\/p>\n
How Montana stands to benefit<\/h2>\n
The bill’s proponents believe that, with updated legislation, Montana will be able to attract mining companies to the state, which they believe will boost the region\u2019s economy both directly and indirectly.<\/p>\n
Speaking to Cointelegraph, Montana State Senator Daniel Zolnikov, who is the chief advocate of the bill, said that the region had a lot to gain by embracing the digital asset industry. He explained that, by permitting crypto mining operations to function without restrictions, Montana would potentially attract more businesses and investments from the wider cryptocurrency sector:<\/p>\n
\u201cI expect if my legislation passes into law, Montana will attract more digital asset miners who will invest in many of the rural communities in Montana, creating jobs where they are most needed.\u201d<\/p><\/blockquote>\n
\u201cI hope this will also signal to the larger digital asset industry that Montana welcomes their innovation as well as new innovative companies into our state,\u201d he added.<\/p>\n
Sustainability concerns about crypto mining<\/h2>\n
Not everyone shares Zolnikov’s optimism about the effect crypto mining could have on small towns and communities. <\/p>\n
While the influx of crypto mining companies may result in a short-term spike in development, Colin Read, former mayor of Plattsburgh, New York, and SUNY economics professor, said that mining companies generally fail to deliver on their promises of creating jobs. In 2021, he told CNBC: <\/p>\n
\u201cCounties and cities are enticed by all these promises of job creation, which \u2014 when you look into it, and I have \u2014 they just don\u2019t materialize.\u201d<\/p><\/blockquote>\n
It is also likely to cause an influx of crypto mining companies, and this could lead to energy and sustainability challenges.<\/p>\n
The state of New York, for example, has had to deal with related issues since 2018, when it experienced an increase in crypto mining firms lured by its affordable energy. The situation caused retail energy rates to skyrocket due to increased demand and compelled the New York Public Service Commission to introduce steeper energy tariffs for crypto miners to rein in the problem.<\/p>\n
Sustainable power supply issues have also emerged in states like Texas, where a considerable number of crypto-mining businesses have set up operations.<\/p>\n
Power grids usually experience overloading issues during periods of extreme weather conditions, such as heat waves and winter storms. This is due to the fact that the general public often cranks up their air conditioning during these times, resulting in an overtaxed grid. The situation has, on occasion, forced miners in Texas to pull the plug on their systems in order to ease the strain on the grid.<\/p>\n
There are further examples from within Montana itself. Missoula County, responding to concerns over power consumption and pollution, has required\u00a0crypto mining firms to either consume or generate enough renewable energy to cover 100% of their operations.\u00a0<\/p>\n
<\/p>\n
Montana experiences power-demanding weather conditions. Summer heat in the state can sometimes rise to over 100 degrees Fahrenheit, and Arctic blasts in winter can cause sub-zero temperatures. The extreme temperatures have contributed to the state having one of the highest per capita energy consumption rates in the nation.<\/p>\n
Due to mounting environmental concerns surrounding the ecological impact of cryptocurrency mining, several American states have implemented laws that place limits on such energy-intensive activities. The laws often put caps on energy usage or place restrictions on the type of energy sources that can be utilized.<\/p>\n
Most recently, New York imposed a temporary ban on mining firms that use non-renewable energy sources. The decision was made with the aim to mitigate the state’s carbon footprint following increased pressure from environmental groups. Related problems are likely to crop up in Montana if its crypto mining bill is passed.<\/p>\n
Zolnikov addressed some of the sustainability concerns, stating, \u201cMontana already has an energy mix that makes it attractive to the digital asset mining industry, and my intention with introducing and hopefully passing this legislation is to grant legal certainty for digital asset miners to continue operating in the state for the long term.\u201d<\/p>\n
Recent:\u00a0Crypto reform coming to US in 2023, says former White House chief of staff<\/em><\/strong><\/p>\n
Montana presently possesses an array of geothermal, wind, solar and hydro energy sources. The Missouri River, the United States\u2019 longest river, flows from western Montana, and its tributaries are also used to generate hydroelectric energy.<\/p>\n
A delicate balancing act<\/h2>\n
Montana\u2019s pro-crypto mining bill is set to encourage more cryptocurrency mining businesses to set up their facilities in the state. While its approval is expected to bring some positive transformations to Montana, some initial teething problems are expected, especially related to eco-friendly and sustainable energy. <\/p>\n
Presently, the state possesses a wide range of both renewable and non-renewable energy sources that can be harnessed for more energy. However, it will be interesting to see how the state attunes to emerging changes if the pro-cryptocurrency mining legislation is passed.<\/p>\n