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Donald Trump is doubling down on his ‘crypto’ support, raising the specter of an unfettered block reward mining regulatory regime in the United States that would cost the country far more than it’s worth.
On July 10, rumors of Trump’s plans to speak at an upcoming BTC conference in Nashville were confirmed. Trump will give a 30-minute speech on July 27, the closing day of the three-day event, during which he’s expected to expand on his recent embrace of all things’ crypto,’ including his support for the BTC mining sector.
Following President Biden’s debate debacle, Trump has established a clear polling lead but his team continues to look for any edge that might tip swing voters his way. A new poll released by the VC firm Paradigm claimed that “crypto helps persuade Never Trump Republicans to vote for Trump” and “Republicans who own crypto are more non-white and younger than typical Republicans, exactly the votes Trump needs in this election.”
The GOP released its 2024 platform this week, confirming that the party has now completely remade itself in Trump’s image. The platform featured a ‘Champion Innovation’ section with language pledging to “end Democrats’ unlawful and unAmerican Crypto crackdown” and to “defend the right to mine” BTC.
The platform’s overall tone and occasionally odd capitalization will be only too familiar to anyone familiar with Trump’s social media posts. Axios reported that Trump “personally” edited the document to ensure it met with his approval.
In June, Trump met with a group of U.S.-based mining operators, including representatives from Riot Platforms (NASDAQ: RIOT), Marathon Digital (NASDAQ: MARA), Core Scientific and other firms. Trump later posted to his Truth Social account that BTC mining “may be our last line of defense against” a central bank digital currency and so he wants “all the remaining [BTC] to be MADE IN THE USA!!!”
Trump, who previously called BTC “a scam against the dollar” but now accepts campaign contributions in BTC and pledges to be the first “crypto president,” continues to show that his understanding of ‘crypto’ is severely limited.
For instance, Trump appears to believe that BTC mined by U.S. companies somehow stays in the U.S. forever rather than being sold as soon as they’re received to help financially struggling miners pay their enormous electricity bills.
Trump’s post also exposed his bizarre belief that supporting BTC miners would allow the U.S. to become “energy dominant,” despite overwhelming evidence of the huge strain that mining utility free BTC places on U.S. energy grids. In February, the U.S. Energy Information Administration (EIA) estimated that ‘crypto’ mining accounted for as much as 2.3% of national electricity consumption last year.
Worse, miners have struck deals in some states that allow them to pre-purchase significant allocations of power during low-demand periods and then sell this supply back to the state at much higher prices when demand soars. Some states even pay miners millions to switch off their machines during peak demand periods, offering these companies windfalls they couldn’t derive from actually mining.
What’s the BTC equivalent of black lung disease?
It’s particularly galling that BTC mining comes at such an enormous cost to U.S. taxpayers despite the BTC protocol’s benefits being limited to a comparative handful of individuals/entities. It’s a clear case of ‘socializing the risk and privatizing the profits’ that the BTC camp appears only too eager to see perpetuated and even expanded.
Chris Cook, president of mining operator Exacore, was at the June meeting with Trump at the ex-president’s Mar-a-Lago resort. Cook claimed that Trump believed BTC mining could be a major job-creator. Cook even claimed laid-off coal miners could be taught to “operate a [BTC] mine.”
In 2022, there were over 43,000 Americans working in coal mines, down from nearly 66,000 in 2015. The largest BTC mining sites employ only a couple dozen staff, so no one should expect BTC to become an employment white knight.
Canadian provinces, having bought into BTC mining operators’ grandiose job projections, are now turning off the electricity taps. British Columbia suspended new mining permits in December 2022 based on the unfair trade-off between the miners’ need for “massive amounts of electricity … while creating very few jobs in the local economy.”
Ignorance is bliss
On July 10, the EIA held a webinar during which it discussed a possible second attempt at conducting a survey of ‘crypto’ miners’ energy consumption. The EIA’s first attempt was scuttled in February after mining stakeholders—including Riot Platforms—filed a court challenge alleging violations of the 1995 Paperwork Reduction Act while also claiming that some of the information the EIA sought was proprietary.
The mining advocates want someone other than the EIA to conduct the survey, (presumably, someone on or soon to be on the industry’s payroll). Stakeholders also urged the EIA to include all data centers—cloud storage, artificial intelligence (AI), etc.—in the proposed survey so as not to ‘single out’ mining operators for special scrutiny.
Before the EIA’s survey actually goes forward, the agency must first craft the outlines of its proposal, followed by a 60-day comment period and a 30-day review process. There will likely be other legal delays mounted by the industry in the hope that Trump will soon be back in the White House and his political appointees can scrap these survey plans once and for all.
Laboring under a delusion
This EIA webinar featured plenty of industry talking points, including the claim that grid operators paying the miners not to mine is somehow a boon for taxpayers rather than the obvious corporate welfare that it is.
But mining’s ‘alternative facts’ aren’t limited to North America, as a group called Bitcoin Policy UK (BPUK) just released a new paper it hopes will be considered by the U.K.’s new Labour government.
BPUK claims the nation is facing an “oversupply of energy” that will require new energy hogs to consume, so the mining sector is patriotically volunteering to “use any and all stranded or wasted energy available.” The plan is to convert this spare energy into “productive economic output” while (surprise!) “increasing economic activity at the local level via job creation.”
Somehow, without actually building any energy-generating infrastructure of its own, the U.K. mining sector’s insatiable electricity demands will increase “the share of green energy in the UK’s supply” by, er, well, that part isn’t clear.
But since all this new green energy will be immediately hoovered up by BTC miners, mining won’t do all that much to reduce overall consumption, so current fossil fuel-powered energy production will be sticking around longer.
A sickening feeling
Some nations are grappling with mining operators just straight up draining local energy grids without permission. Malaysia is home to around 2.5% of BTC’s global hash rate, but the government recently stated that unauthorized operations have cost the country around RM3.4 billion (US$725 million) since 2018.
It would be bad enough if mining’s societal costs were limited to taxpayers’ wallets, but as a Time Magazine report revealed this week, BTC mining sites can also prove detrimental to the physical and mental health of those who live nearby.
The report focused on citizens living adjacent to a mining site in Granbury, Texas, operated by Marathon Digital. The site, based on a gas plant that welcomed the BTC mining operation in mid-2022, produces a near-constant cacophony from the 30,000+ mining units contained therein. Locals described the sound emanating from the mining site as being “like a ceiling fan, then a leaf blower, then a jet engine.”
Locals also claimed there’d been no health issues associated with the plant until the mining operation got underway. After that, the inability to sleep as the mining units and cooling fans cranked away 24/7 led to a number of locals complaining of myriad mental and physical problems. Local doctors agree that the noise “is detrimental to [locals’] health and anxiety.”
Drawing a direct line between the excess noise and locals’ health issues can be problematic, but studies have shown elevated risks for cardiovascular disease and diabetes in individuals with sustained exposure to excessive noise. Kids exposed to excessive noise have below average reading comprehension and animals can also suffer a variety of negative health impacts.
The Time Magazine report also detailed the efforts of a local constable to repeatedly ticket Marathon for violating the state’s 85-decibel noise cap. The constable has issued over three dozen of these ‘disorderly conduct’ tickets at $500 a pop, but Marathon—which reported “record earnings” in Q1 2024—can easily afford it.
The tickets were issued directly to David Fischer, who manages the Granbury plant on behalf of Marathon. This week, a Hood Country jury acquitted Fischer on 12 counts of violating the state’s noise laws based on their belief that Fischer, as an individual, was powerless to do anything about the plant’s noise levels on his own.
Originally, Texas officials thought they were on to a good thing by rolling out the welcome mat for BTC miners and AI data centers. But last month saw a number of high-ranking officials—including Lt. Gov. Dan Patrick—questioning the wisdom of allowing any more of these foxes inside the state’s chicken coop.
Patrick’s criticism noted that mining and AI “produce very few jobs compared to the incredible demands they place on our grid.” Patrick warned that the state can’t become “the wild, wild west of data centers and crypto miners crashing our grid.”
We were promised jetpacks
The BTC mining sector’s excesses would be far more tolerable if it produced anything of value for society at large. But since BTC has no utility, all that energy is expended for the sole purpose of enriching a relative handful of BTC whales.
The recent ‘halving’ event lowered the BTC block reward to 3.125 tokens, and it will fall again to 1.5625 in 2028. The fiat value of the BTC token is also falling—despite the best efforts of the Tether-based wash traders—further reducing miners’ revenue. By 2028, if BTC is still around, its mining concentration will likely be something out of the Highlander movies, i.e., there can be only one.
With the BTC Core developers having artificially restricted the network’s block-size, the BTC blockchain can only handle a maximum of 4,000-5,000 transactions every 10 minutes. This limitation makes a mockery of Satoshi Nakamoto’s original vision for Bitcoin as a peer-to-peer electronic cash system.
That is unless your vision of a global electronic cash system would restrict each of the planet’s 8.2 billion individuals to one financial transaction every thirty six years or so. (Finally, a valid excuse not to buy the next round!)
Satoshi’s plan was for the block size to continually rise, with a corresponding rise in the number of transactions in each block. Fees from these transactions were intended to initially supplement and eventually supplant the block reward diminishing subsidy, but the 2017 hard fork that resulted in the BTC protocol ensured Satoshi’s vision would never come to fruition.
The BSV Blockchain is considered the original Bitcoin because it remains true to Satoshi’s vision and features a locked protocol that can trace its pedigree back to Bitcoin’s Genesis block. BSV also imposes no cap on transaction volume, which currently enables it to handle 1.1 million transactions per second versus BTC’s maximum throughput of seven transactions per second.
BSV’s ability to scale means it can process exponentially more transactions than BTC for the same amount of energy expended. This is not only environmentally friendly, but BSV’s focus on utility beyond price speculation allows a much wider swathe of humanity to benefit from its environmental footprint.
Honestly, if BSV was Noah’s Ark, the entire pantheon of giant dinosaurs and mosasaurs could have fit on board alongside all the other animals and there still would have been enough room for the Targaryens’ dragons.
By comparison, BTC is a leaky rowboat drifting in the middle of the North Atlantic, big enough for Michael Saylor and maybe a couple of other major BTC bagholders. But there’s definitely not enough room for you.
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