Kentucky Lawmakers Submit Bill to Lure Crypto Mining Firms Into the State
Two Kentucky lawmakers have submitted a bill incentivizing mining firms to establish operations in the state.
The United States appears to be coming into its own as the world's next Bitcoin mining frontier, with companies lining up to establish their presence in the country.
While states like Texas currently leads the charge, others are also looking to collect some mining tax revenue.
Tax Breaks for Mining Companies
Recently, lawmakers in Kentucky submitted a policy proposal aimed at attracting crypto mining firms into the state. Titled “AN ACT relating to the taxation of the commercial mining of cryptocurrency,” the proposal was submitted by Steven Rudy and Chris Freeland, both Republican members of the state's legislative body. Public data shows that it was submitted on January 8 and is still in its early reading stages.
In the proposal's foreword, the state reps highlighted the state's potential of becoming a leader in the U.S bitcoin mining scene using its resources. They spoke glowingly of Kentucky's abundance in electricity supply, which allows it to provide lower rates than most states.
Data shows that Kentucky's electricity rates as of October 2020 were 11.07 cents per kilowatt-hour (kWh).
The state gets most of its electricity from coal, and it also has two of the country's largest electrical power plants within its state lines.
The new bill focuses primarily on enacting state law changes that will incentivize crypto mining firms to build operations in Kentucky. Some of these incentives include sales and use tax exemptions on electricity and tangible property used in mining facilities.
Competition is Heating Up
Kentucky's new approach to crypto mining comes as the United State's mining landscape begins to take shape. Some miners took bold steps in 2020 and would probably expect a considerable boom in operations going into this year.
Last month, Marathon Patent Group announced the purchase of 70,000 Antminer S-19 ASICs from Chinese mining rig manufacturer Bitmain. The acquisition was reportedly priced at $170 million, and Marathon explained that it would help grow its operating capacity to 103,000 miners. The Nevada-based firm expects to see a growth in hashrate to 10.36 EH/s. Orders should run through July to December of this year.
Marathon's largest competitor appears to be Colorado-based mining firm Riot Blockchain. Around the time Marathon announced its purchases, Riot also confirmed the purchase of 15,000 Antminer rigs from Bitmain. In a release, Riot explained that it purchased 12,00 Antminer S19j Pro miners and 3,000 S19 Pro rigs, all at the cost of $35 million.
Riot believes that the purchase will grow its hashrate by 65 percent, upping its capacity to 37,000 miners and increasing its hashrate to 3.8 EH/s. Delivery and deployment are set to run from May to October 2021.
With such big money flowing into mining, it's easy to see why Kentucky will want to attract investments too.