Crypto miners in Uzbekistan looking to avoid paying twice as much for electricity—and get a break on their taxes—have been offered another option: buying solar panels.
According to Reuters, miners who pay to set up their own solar panel systems will be exempt from paying federal income taxes, while those who still rely on the national power grid will have to pay double regular rates, plus surcharges during peak hours.
The massive amount of electricity required to mine cryptocurrency has become a hot-button issue in the battle against climate change. That’s especially true in the case of Bitcoin and Ethereum, which require an energy-intensive proof of work consensus algorithm to solve complex math equations. Typically, multiple computers working together are required to generate profits. Bitcoin mining farms have sprung up worldwide since 2010 as crypto evangelists rushed headfirst into this digital gold rush.
But last year, the Chinese government, citing regulatory and environmental concerns, passed laws that effectively banned crypto and mining within its borders. After China’s crackdown, many miners moved to neighboring countries, like Uzbekistan and Kazakhstan, where power was cheaper and regulations were scarce or nonexistent. But now even those countries are being forced to adjust.
According to a Cambridge Center for Alternative Finance report, the United States has become a hub for Bitcoin mining operations, with the U.S. surpassing China as the nation with the most miners in 2021. Also, at least 37 states have bills up for votes to maximize potential cryptocurrency benefits.
Along those lines, the New York State Assembly voted last month to enact a two-year moratorium on mining activity in the state. While in Texas, the Fort Worth City Council just approved accepting donated mining units to mine Bitcoin at City Hall.