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How does the infrastructure bill affect the mining industry in the US?

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How does the infrastructure bill affect the mining industry in the US?

On August 10, the United States Senate voted to pass a $1 trillion bill to revitalize America’s infrastructure. From the standpoint of the crypto community, miners in particular, the Senate’s foray into crypto legislation has been a disaster. Unless the language defining brokers in the bill is clarified, it will singlehandedly thwart the growth of a domestic industry just as it is taking off.

As written, the bill allows for multiple interpretations of the term “broker.” In the English language, there is no real controversy — or ambiguity — about what a broker does. According to Merriam-Webster’s online dictionary, a broker is “one who acts as an intermediary: such as […] an agent who negotiates contracts of purchase and sale (as of real estate, commodities, or securities).” In traditional finance, brokers purchase and sell financial assets, such as stock and bonds, for their clients. Compare this with miners of Bitcoin (BTC), the dominant cryptocurrency. In contrast to brokers, Bitcoin miners solve cryptographic puzzles to validate new blocks, an essential activity for the Bitcoin network to operate. The miners receive Bitcoin as compensation for providing this computation service. Thus, they definitively are not brokers.

Related: Let’s be clear: Blockchain technology is infrastructure

Unfortunately, the bill passed by the Senate contains overly broad and ambiguous language in its definition of “broker”:

“Any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”

A threat to the BTC mining industry

In defining a broker this way, the bill requires mining companies to provide the same information to regulators that a stockbroker is required to provide, such as taxable net gain or loss, identity of the buyer/seller, the amount of the transaction and the location of the transaction. Simply put, miners have no way to collect this information because they only validate the blocks, not the information inside them. As such, if miners are considered brokers under this language, they would not be able to comply with the law. This uncertainty, intentional or not, poses an existential threat to the U.S. Bitcoin mining industry.

Crypto mining is vital for the functionality of proof-of-work cryptocurrency networks, the most notable being Bitcoin. Without mining, many of the revolutionary aspects of blockchain technology would not be possible. For example, aspects such as decentralization, accountability, verification and security are all made possible through mining. Without mining, there is no Bitcoin network.

Currently, the U.S. crypto mining industry is expanding. Features such as a stable government, cheap energy, excess land and a strong economy have made the country an attractive location for crypto miners. Bitcoin adoption is increasing, both among individuals and companies — as adoption takes hold, the U.S. industry is growing employment for financial professionals, software developers, engineers, marketers and facilities managers.

Related: Broker licensing for US blockchain developers threatens jobs and diversity

Many Americans hold Bitcoin balances and many individuals globally use Bitcoin to transfer earnings and wealth to families in different countries. Citizens of the countries with mismanaged currencies are trusting the Bitcoin network to maintain their purchasing power in the face of rapidly depreciating currencies. In short, the United States is an important player in a rapidly growing market that provides value to millions of people. And this role is expanding as China, which does not trust the decentralized, market-based ethos of Bitcoin, has moved to shut down mining inside its borders.

Related: China crackdown shows industrial Bitcoin mining a problem for decentralization

The Senate bill snatches defeat from the jaws of victory. Just as U.S. crypto mining is set to expand exponentially, the uncertainty caused by the bill’s ambiguous language is stymieing investment. At our company, we have experienced this firsthand. Employment, wages and resulting consumer spending have been put on hold because of the bill — a sad irony given that the purpose of the bill is to support economic growth and job creation.

Unless the language in the bill is changed to clarify that miners are not brokers, the United States will miss out on several benefits that crypto mining offers, such as grid stability, capitalization of stranded energy, and the repurposing of wasted energy. Crypto mining enhances grid stability by helping utilities balance supply and demand. Miners maximize profits when energy is cheap and plentiful, providing utilities revenues when prices are low. When energy demand increases and prices rise, crypto miners stop mining, which releases energy supplies to the grid and brings down prices for other users.

Crypto mining and energy consumption

The narrative that crypto mining wastes energy has it backwards. Crypto mining does not waste energy but, instead, makes use of energy that would otherwise be wasted. Energy producers do not finetune their output to perfectly match supply and demand. Energy is frequently produced and not used because of mismatched supply and demand, and/or is lost due to transmission over long distances.

Related: Green Bitcoin: The impact and importance of energy use for PoW

The most cost-effective miners are located close to the utility’s power. The Bitcoin these miners “produce” does not create incremental demand for additional energy, but rather uses energy that would be produced anyway. Thus, in addition to providing investment and jobs to local economies, crypto miners promote a more robust grid, reduce energy waste and generate revenues that utilities can use to transition operations off of fossil fuels and into renewable energy sources.

There is still hope

Given these and other benefits, the Senate’s broadside against crypto mining is both puzzling and deflating. But there is still a chance that the U.S. House of Representatives rectifies the unfortunate language. Although the proposed amendments to the Senate infrastructure bill were not adopted, the fact that it was offered at all demonstrates that there is some support for crypto mining in the Senate. The House of Representatives may pass a different infrastructure bill. If this happens, it is possible that House and Senate negotiators could produce a final bill clarifying that crypto miners are not brokers. This would be the best outcome for the industry and the economy.

Crypto mining is going to take place somewhere because demand for Bitcoin and other cryptocurrencies is increasing. It would be better for the U.S. economy and the environment if the crypto mining industry continues to expand domestically. The first step to making the U.S. a leader in crypto mining is to clarify that miners are not brokers. The failure to do so will have long-lasting ramifications, preventing the United States from becoming a leading player in this fast-growing industry.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

William Szamosszegi is the CEO and founder of Sazmining Inc., a cryptocurrency mining developer and consulting firm, and host of Everything Crypto Mining: The Sazmining Podcast. He is bullish on Bitcoin’s future as the dominant global digital reserve asset and believes Bitcoin is the solution for layer-one, sound money. William grew up in Maryland and studied psychology and management at Bucknell University. William spends his spare time working out, seeing friends and reading.

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Bitcoin (BTC) Drops Below $60,000 But Correction Could Be Short-Lived

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Bitcoin (BTC) Drops Below $60,000 But Correction Could Be Short-Lived

Bitcoin (BTC) is likely in the middle of a short-term correction that has taken it below $60,000. Following this correction, a rebound in price is likely. 

BTC decreased considerably on Oct 26 and created a bearish engulfing candlestick.  This is a type of bearish candlestick in which the entire upward movement from the previous day is negated with an equal or larger drop the next day.

The main support area is found between $52,400 and $53,350. This range is made up of a short (white) and a long-term (black) Fib retracement level and a horizontal support area. There is also a minor support level at $56,550, created by only the short-term Fib level. 

Technical indicators support the continuation of the decrease.

The MACD, which is created by short and long-term moving averages (MA) is falling. Currently, the MACD is still positive, indicating that the short-term trend is moving faster than the long-term trend. However, it’s decreasing, signaling that the MA is decelerating.

The RSI, which is a momentum indicator is also decreasing. It’s above 50, signaling that momentum is still bullish, but the decreasing RSI indicates that momentum is also losing strength.

BTC gets rejected

The six-hour chart shows that BTC is moving underneath a descending resistance line since the Oct 20 all-time high price. 

More recently, the line rejected the price on Oct 25 (red icon), initiating the current downward move. The rejection also coincided with the $63,650 resistance area.

As long as the descending line remains unbroken, the short-term trend is considered bearish.

Wave count

The short-term wave count shows that BTC is likely in an A-B-C correction, which is potentially contained inside a parallel channel. For a long-term wave count analysis, click here.

Currently, BTC is in the C wave, which is the final portion of the correction and after which a rebound in price is likely.

There is considerable support near $56,500 and a drop to those levels would give waves A:C an exact 1:1 ratio. Furthermore, it would coincide with the support line of the channel. In addition to this, the area coincides with the short-term Fib support outlined in the first section. 

For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Bitcoin drops $1K in five minutes in fresh dip below $60K

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Bitcoin drops $1K in five minutes in fresh dip below $60K

Ethereum slips below $4,000 as an anticipated correction suddenly takes hold of crypto markets.

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Bitcoin drops K in five minutes in fresh dip below K

Bitcoin (BTC) fell sharply on Oct. 27 as $60,000 finally gave way to two-week lows.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin bites into major buy wal

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD nearing $58,000 at the time of writing, hitting its lowest since Oct. 15.

The move follows multiple retests of $60,000, with Bitcoin now taking liquidity in a large support wall with $57,000 as its base.

Analysts, as Cointelegraph reported, were already prepared, with some data suggesting a deeper dive to a low as $50,000 would still preserve the overall bull trend.

#Bitcoin couldn’t break through $63.6K and tests the other side of the range.

Might be dropping another time if $61.6K can’t break and then I’m looking at $58K next. pic.twitter.com/HIsvhE5ZlZ

— Michaël van de Poppe (@CryptoMichNL) October 27, 2021

Commenting on the situation meanwhile, Charles Edwards, CEO of investment firm Capriole, blamed leveraged traders for sparking the volatility.

“Basically Bitcoin looks incredible here on most metrics, but leverage traders have gone out of control,” he argued.

“We won’t get sustainable price rises until that changes.”

Data showed $500 million being liquidated in a single hour across cryptocurrency.

Altcoins lose big on trend reversal

Ether (ETH) led a bleed from altcoins Wednesday, falling below its hard-won $4,000 support line.

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView

Related: Expanding ecosystem and $1.86B futures open interest back Solana’s $250 target

Several of the top ten cryptocurrencies by market cap saw daily losses of over 15%, including Dogecoin (DOGE) and Solana (SOL).

Shiba Inu (SHIB) was still largely in the green, up 23% on the day despite the market turnaround and continuing a wild month.

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Redditors cheer as GameStop assembles team of NFT experts

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Redditors cheer as GameStop assembles team of NFT experts

“Future creators won’t just build games but also the components, characters, and equipment. Blockchains will power the commerce underneath,” Gamestop’s Head of Web3 Gaming job listing reads.

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Redditors cheer as GameStop assembles team of NFT experts

GameStop (GME) is assembling a team of blockchain and NFT experts to work on the firm’s upcoming NFT platform.

The firm’s GME stock is a cult favorite amongst retail traders as a result of the r/wallstreetbets and Robinhood saga earlier this year. On Reddit the r/Superstonk community boasts 659,000 members, and is dedicated to hosting business and stock discussions related to GME.

A post about GameStop’s job listings yesterday has received more than 10,000 upvotes at the time of writing, with many members posting bullish sentiments over GameStop’s latest move.

GameStop quietly unveiled a bare-bones website for its NFT marketplace in May. The site currently features a Nintendo Gameboy-style gaming console with an Ethereum logo, along with a message calling out for recruits to work on the platform.

Since then the firm has held its cards close to its chest, however on Oct. 25 it listed a total of eight jobs for crypto-friendly candidates, including three roles for NFT experienced software engineers, three jobs for product marketers and with two roles focused on Web3 based gaming.

One of the listings for the Head of Web3 Gaming job says that GameStop is looking for someone with experience with “Ethereum, NFTs and blockchain-based gaming platforms.” The firm has also hinted that there are some plans related to the Metaverse in the works.

“GameStop is looking for a unique individual who can help accelerate the future of gaming and commerce. In this future, games are the places to go, and play is driven by the things you bring. Future creators won’t just build games but also the components, characters, and equipment. Blockchains will power the commerce underneath,” the job listing reads.

Web3, billions in revenue, NFTs, Ethereum Layer 2. probably nothing. $GME pic.twitter.com/s3PiaqtWQl

— Chris SilvΞstro (@vestro) October 26, 2021

Related: Reddit may be preparing to launch its own NFT platform

Members of the r/Superstonk community were singing the firm’s praises yesterday, with “Triaspia2” calling it one of the “best job listings” they had seen, while pledging to buy more GME as it was a “bullish signal.”

Redditor “Donnybiceps” was equally bullish, noting that:

“NFTs are the future and people who haven’t gotten on board the GME train while knowing all these clues then you should be blaming yourself for not thinking this through.”

GME has had a volatile performance in October, going as low as $166 before bouncing to around $187 and subsequently crashing down again. However, according to data from Tradingview, the price of GME has still gained 2.8% this month to sit at $178 at the time of writing. The year-to-date gain for GME is a whopping 844%.

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