📖
Web3 Encyclopedia
  • Welcome aboard!
  • Source
  • 😀Evolution from Web 1.0 to Web 3.0
    • Web 1.0 Web 2.0 Web 3.0
    • Key Features
    • Current Limitations
    • Future of Web 3.0
    • Learn: What Is Web3?
    • Learn: Will Every Brand Have a Web3 Strategy?
    • Learn: Big Ideas in 2023
    • Learn: The Web3 Paradox: Why Scaling Usage Alone Won't Lead to Mass Adoption?
    • Learn: Is Web3 A Marketing Buzz or Tech Revolution?
    • Learn: What is the relationship between blockchain and Web3?
    • Learn:Empowering Women in Web 3.0: The Role and Contributions of Women in Blockchain, DeFi, and dApp
    • Learn: Web 3.0 and the Future of E-Commerce
    • Learn: 12 ways ecosystem projects can attract more developers
    • Learn: How Web3 is Impacting Education?
    • Learn: Web3 And The Future Of Digital Advertising
    • Learn: Web3’s impact on personalization, trust and engagement
    • Learn: Web3-Powered Identity Management -- Unlocking the Benefits of Decentralization
    • Learn: Why Web2 companies fail in Web3 while others made it?
    • Learn: To Identify or Not in a Web3 World?
    • 🤫[Insider Series] McKinsey x Web3
    • TL;DR 👀
  • 💲Blockchain Fundamentals
    • Why is Blockchain So Popular?
    • Introduction to Blockchain
    • Blockchain Misconceptions
    • Blockchain vs Bitcoin, Database, Cloud
    • Consensus Mechanism
    • Public and Private Keys
    • Hash Functions and Cryptography
    • Sharding
    • Types of Blockchains: PoW, PoS and Private
    • Understanding Cryptocurrency
    • Coins vs Tokens
    • Blockchain Trilemma
    • Legality
    • Learn : Google’s Cloud Based Blockchain Node Service
    • Learn: How Blockchain, Digital assets, and Web3 Unlock Financial Inclusion Globally
    • Learn: Will Chinese-Made Crypto Soar Higher?
    • Learn: What Does MiCA Mean for Crypto in Europe?
    • Learn: Unraveling the Intricacies of Blockchain Forensics and Asset Tracking
    • Learn: Promising blockchain use cases in healthcare industry
    • Learn: The Role of Blockchain in Authenticating and Provenance Art
    • Learn: Blockchain-Based Digital Identity: Benefits, Risks, and Implementation Challenges
    • Learn: The Future of Energy Supply Chains
    • Learn: Revolutionizing smart contracts and cryptocurrency
    • Learn: Nigeria goes blockchain
    • Learn: A Game Changer for Online Gaming?
    • Learn: Is blockchain technology ready for high-storage applications?
    • Learn: Will Blockchain Technology Mark a Turning Point in Fraud Prevention?
    • Learn: Why ZK-rollups need data availability?
    • Learn: How will generative AI disrupt blockchain?
    • Learn: A New Blockchain for Generative AI?
    • TL;DR 👀
  • 🏟️Web3 Utilities
    • Decentralized Applications (dApps)
    • Cross-chain Bridges
    • DAO
    • Artificial Intelligence
    • Learn: Is Community-building Essential for Web3 Startups?
    • Learn: ‘Decentralization Theater’
    • Learn: Crypto and AI- A yay or nay combination?
    • Learn: Dissecting the DAO
    • Learn: What is motivating Lido DAO to rise?
    • Learn: How to Turn Your Community Into a DAO?
    • Learn: The Key to Decentralized Decision Making
    • Learn: How Web 3.0 can disrupt the supply chain industry?
    • TL;DR 👀
  • 🪙Bitcoin
    • What is Bitcoin
    • Bitcoin's Blockchain Technology
    • UTXO Model and Transaction Fees
    • Bitcoin Mining and Mempool
    • Learn: What is bitcoin mining?
    • What are Hard Forks and Soft Forks
    • What is SegWit and the Lightning Network
    • Bitcoin Ecosystem
    • Can Bitcoin be Destroyed? Game Theory and Network Attacks
    • Learn: Crypto token supplies explained
    • Learn: What is crypto tax-loss harvesting, and how does it work?
    • Learn: Can Crypto Go Green? How to Invest in Eco-Friendly Cryptocurrencies
    • Learn: Why Did FTX Collapse? Here’s What to Know.
    • Learn: How Sam Bankman-Fried swindled $8 billion in customer money?
    • Learn: How much is Bitcoin worth today?
    • Learn: The Costs of Running a Bitcoin Node In Nigeria
    • Learn: Has 2022 Left Any Crypto Positives?
    • Learn: How Crypto Exchanges Can Be Free of Risk?
    • Learn: Greed, Lies and FTX: Is Crypto a Force for Good or Evil?
    • Learn: Is Crypto a Cultural Movement?
    • Learn: What are the consequences of crypto’s ongoing regulatory process?
    • Learn: Beyond the Crash and Embracing NFTs?
    • Learn: Understanding crypto bag holders and their mindset
    • Learn: Inscriptions: Just A Fad, Or A Real Threat To Bitcoin Becoming Decentralized Money?
    • Learn: How Bitcoin Ordinals Can Change the Future Of Mining?
    • Learn: What is a supernet?
    • Learn: Bitcoin Miners Celebrate 10 Years Since First ASIC, What Changed Since Then?
    • Learn: Bill Vs. CBDC – Why This US Congressman Wants To Block The Fed From Issuing A Digital Dollar?
    • Learn: Why Bitcoin Will Blow People’s Minds In 2025?
    • Learn: How the Howey Test Sheds Light on Cryptocurrency's Regulatory Gray Area
    • Learn: Cryptocurrency vs AI: A Complex Debate
    • Learn: Where the U.S. Government Went Wrong in Regulating Crypto?
    • Learn: The Nostr Privacy Paradox
    • Learn: Do algorithmic stablecoins have a future as centralized coins are under scrutiny?
    • Learn: Is Bitcoin Set To Revolutionize The Financial World With Its Superior Purchasing Power?
    • Learn: What is Shibarium, and what does it mean for Shiba Inu?
    • Learn: What is a crypto dusting attack?
    • Learn: Is the Adoption of Central Bank Digital Currencies (CBDCs) the Future?
    • Learn: How Artificial Intelligence Could Revolutionize Crypto?
    • Learn: What’s next for EU’s crypto industry as European Parliament passes MiCA?
    • Learn: Why the EU Has MiCA and the U.S. Has Securities Law Confusion?
    • Learn: Six New Projects Looking to Mitigate Bitcoin Mining’s Energy Footprint
    • Learn: Who on Crypto Twitter chose not to pay for a blue checkmark?
    • Learn: What is the wash-sale rule in Crypto?
    • Learn: What is Pepecoin and can it flip memecoins Dogecoin and Shiba Inu?
    • Learn: Can you recover stolen Bitcoin from crypto scams?
    • Learn: What the ‘anti-mining bill’ means for the crypto industry in Texas?
    • Learn: Does the US have a crypto ‘tax loophole’ problem?
    • Learn: How users can stay protected?
    • Learn: How Crypto Revolutionize Cheaper and Faster Transactions?
    • Learn: Can NFTs and CFDs be BFFs?
    • Learn: A PR expert’s tips for memecoin projects
    • Learn: Why politicians aren't convinced about the Digital Euro?
    • Learn: How A 90-Year Old TA Theory Predicted The Sudden Bitcoin Boom?
    • Learn: Social Trading Platforms and CFDs: A New Paradigm in Investment
    • Learn: How could the Chinese economic crisis impact Bitcoin and crypto?
    • Learn: How do they compare: Bitcoin IRA vs. traditional IRA?
    • Learn: Why Tokenized Assets Are Safer During a Banking Crisis?
    • TL;DR 👀
  • 🛢️Ethereum
    • Bitcoin vs Ethereum
    • What can Ethereum do?
    • What is Ether (ETH)?
    • What's Unique About ETH?
    • What are Smart Contracts?
    • Energy Consumption?
    • Ethereum Virtual Machine (EVM)
    • Pros & Cons of Smart Contracts
    • Decentralized Applications (dApps)
    • Ethereum Token Standards (ERC-20, ERC-721 and ERC-1155)
    • Evolution of Ethereum
    • How to Get Your First Ethereum
    • Learn: Next Ethereum Upgrade — Shanghai Upgrade
    • Learn: Tipping Scale for Crypto Adoption: Usability vs. Accessibility
    • Learn: Major Publicly Traded U.S. Bitcoin Miner Files For Chapter 11 – Impact On The Market?
    • Learn: 5 altcoin projects that made a real difference in 2022
    • Learn: How Tether Can Be a More Stable Stablecoin?
    • Learn: Are the Ethereum Killers Still Deadly?
    • Learn: What Ethereum Tech Trends Are Weathering the Bear Market?
    • Learn: How Ethereum’s token burns are making it a deflationary cryptocurrency?
    • Learn: A few things to know about Ethereum's Shanghai Upgrade
    • Learn: The Role of Enterprise Ethereum
    • Learn: Understanding Layer 2 Scaling Solutions for the Ethereum Network
    • Learn: The Battle of Giants: Bitcoin vs Ethereum
    • Learn: Cryptography, Smart Contracts and Distributed Networks
    • Learn: The Memecoin Grift and How It Threatens Ethereum Culture
    • Learn: What Is Ethereum’s ‘Data Availability' Problem, and Why Does It Matter?
    • TL;DR 👀
  • 👛Wallet
    • What is a Blockchain Wallet?
    • Hardware / Software Wallet
    • How to Get Your First Cryptocurrency
    • Setting up Metamask Wallet
    • Learn: How to connect the Avalanche network to MetaMask?
    • Learn: How to pass on your crypto when you die?
    • Learn: What are hierarchical deterministic (HD) crypto wallets?
    • Learn: Pros and Cons of Digital Wallets
    • Learn : How Web 3.0 Wallets Are Redefining Digital Asset Security?
    • Learn: Open source: Buzzword or real security for crypto wallets?
    • TL;DR 👀
  • 🌕New & Rising Protocols
    • Binance
    • NEAR
    • Solana
    • Fantom
    • Polygon
    • Cardano
    • Polkadot
    • Cosmos
    • Harmony
    • Cronos
    • Optimism
    • Terra
    • Who Will Win the L1 Wars?
    • Learn: New Layer 1 Blockchains Are Expanding the DeFi Ecosystem But No Eth Killers Yet
    • Learn: Is an Increased Focus on Layer-2 Scaling and ZK Technology Justified?
    • Learn: What Are the Stakes in the SEC vs. Ripple Case?
    • Learn: What is The Graph, and how does it work?
    • TL;DR 👀
  • 📈Decentralized Finance (DeFi)
    • CEX vs DEX
    • CeFi vs DeFi
    • Algorithmic Stablecoins
    • Airdrop
    • Liquidity Pool
    • Impermanent Loss
    • Swapping
    • Wrapped Token
    • Arbitrage Opportunities
    • Staking
    • Yield Farming
    • Total Value Locked (TVL)
    • Gas Fees
    • Lending & Borrowing
    • Useful Tools
    • Activity: Uniswap & Pancake Swap
    • Learn: Automated Market Makers (AMMs) in DeFi
    • Learn: Crypto Moving towards ESG: What Is Regenerative Finance (ReFi)
    • Learn: What Is dYdX? Understanding the Decentralized Crypto Exchange
    • Learn: It's A Wrap - DeFi in 2022
    • Learn: Why DeFi should expect more hacks this year?
    • Learn: The Security Challenges of DeFi
    • Learn: The Promising Future of Decentralized Social Media on Web 3.0
    • Learn: Can CBDCs, Tokenized Deposits, Stablecoins and DeFi Coexist?
    • Learn: The Increasing Popularity of DeFi and Its Potential to Disrupt Traditional Finance
    • Learn: The future of DeFi is ReFi
    • Learn: DeFi aggregation
    • TL;DR 👀
  • 🙈Non-Fungible Token (NFT)
    • What are NFTs?
    • Case Study
    • Storage
    • Who are the Players?
    • NFT Marketplace
    • NFT Useful Resources
    • Activity: Mint Your Own NFT
    • Learn: How You Can Prevent Hackers From Stealing Your NFTs?
    • Learn: What Is an NFT Floor Price?
    • Learn: Should Bored Ape buyers be legally entitled to refunds?
    • Learn: China’s view of NFTs different from rest of the world’s
    • Learn: NFTs IRL: How Digital Collectibles Are Forging Offline Experiences
    • Learn: How NFT Brands Can Cut Through The Noise
    • Learn: How Web3 disrupts the music sector?
    • Learn: Unlockable content in NFTs
    • Learn: Why Meta Matters in NFTs?
    • Learn: Should NFT Marketplaces Become Centralized?
    • Learn: Hermès vs. MetaBirkins: The NFT Case That Could Have Major Trademark and Artistic Consequence
    • Learn: What are phygital NFTs, and how do they work?
    • Learn: What is NFT ticketing and how does it work?
    • Learn: Why Solana NFT marketplace is seeing less active users?
    • Learn: NFTs and Intellectual Property
    • Learn: How AI Is Changing Artistic Creation and Challenging IP Laws?
    • Learn: The Future of NFTs: Exploring Dynamic NFTs and Their Versatile Use Cases
    • Learn: NFTs in the event and ticketing industry
    • Learn: What is NFT rarity, and how to calculate it?
    • Learn: What happens to your NFTs when you die?
    • Learn: Dogecoin-Like Spike in Milady NFTs After Elon Musk’s Tweet, But Will It Last?
    • Learn: What are NFT royalties, and how do they work?
    • Learn: How developers aim to store crypto inside NFTs?
    • Learn: Generative Art NFTs: What Are They & Why Are They So Popular?
    • TL;DR 👀
  • 💗Metaverse
    • What is the Metaverse?
    • Metaverse Economy
    • Metaverse Companies
    • GameFi
    • Learn: Are We in the Metaverse Yet?
    • Learn: Can the Metaverse exist without blockchain?
    • Learn: Can the Metaverse Facilitate Sustainable Growth of Defi Systems?
    • Learn: What is the role of biometrics in the metaverse?
    • Learn: Can metaverse be the future court?
    • Learn: Metaverse Fashion Is on the Rise, but for Whom?
    • Learn: Sustainability in the Metaverse: Challenges and Opportunities
    • Learn: How To Build A Responsible Metaverse?
    • Learn: What is a VTuber, and how do you become one?
    • Learn: How proof-of-identity provides human experiences?
    • Learn: The “Metaverse” Next Frontier for Business: Impact And Challenges
    • Learn: The 5 Biggest Misconceptions About The Metaverse
    • Learn: Why culture and ownership are critical to the metaverse?
    • TL;DR 👀
  • 👾Career in Web3 (coming soon)
    • Developers
    • Moderators
    • Community Managers
    • UI/ UX Designers
    • Digital Fashion Designers
  • 🌱Sustainability (Coming Soon)
    • Industry Effort
    • Co-author
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On this page
  • The pioneer’s path to regulation
  • Hot season for lawmaking initiatives
  • The mining bill
  • What’s next?
  1. Bitcoin

Learn: What the ‘anti-mining bill’ means for the crypto industry in Texas?

The Lone Star State has become one of the hottest points on the U.S. map in terms of crypto regulation.

PreviousLearn: Can you recover stolen Bitcoin from crypto scams?NextLearn: Does the US have a crypto ‘tax loophole’ problem?

Last updated 1 year ago

In late April, over a hundred people gathered near the Texas Capitol building to protest.

Peaceful protests in the United States are not uncommon, but what made this one unique was that its participants were gathered to advocate for the right to own and use cryptocurrencies.

The location is also puzzling, as the Lone Star State has been presenting itself as a potential hub for the crypto industry in the United States, with varying state and federal laws creating an uneven regulatory landscape.

And so, the crypto enthusiasts gathered together in Austin to protest Senate Bill 1751, which will strip cryptocurrency mining operators of some existing tax incentives. The bill has and has proceeded to the Texas House of Representatives.

Texas doesn’t fit the binary narrative of crawling into a “crypto-hostile” mode. While its legislators want to strip crypto miners of tax incentives, they almost simultaneously vote for the right of individuals to possess crypto be included in the state’s Bill of Rights.

How did such peculiar legislative moves come about, and what does it mean for the industry?

The pioneer’s path to regulation

Almost 10 years ago, Texas to address Bitcoin regulation when the Texas Banking Commissioner issued a memo proclaiming that the original cryptocurrency “is best viewed like a speculative investment,” not as money.

It was good news for the early adopters, as they were spared from the interest of regulators. From then on, Texas began to attract local and global crypto businesses.

In 2021, the Texas Department of Banking declared that local banks are allowed to store cryptocurrencies for their clients. A month later, the state legislature amended the local Uniform Commercial Code to . Another bill established a blockchain working group in the state.

However, when Texas made it into Cointelegraph’s list of the , it was more due to its unique crypto mining conditions than its regulatory efforts.

Energy prices for industrial clients were among the lowest in the country — or in the opinion of mining company Layer1 Technologies then CEO Alex Liegl — .

Following in 2021, the U.S. state was of large miners worldwide. Governor Greg Abbot expressed his excitement about Texas becoming the next “crypto leader,” with local communities , reopening industrial spaces and hiring people in small towns.

The trend continued into 2022, with mining behemoths like Riot Blockchain . Even the record-breaking heat waves in the summer and deadly winter storms , which accepted some periods of unplanned stoppages.

The Texas Comptroller’s office even tried to clarify that cryptocurrency mining facilities “do not place .” The same words have been repeated by Senator Ted Cruz, who expressed his hope to make Texas

Hot season for lawmaking initiatives

However, despite friendly overtures to the crypto industry, Texan authorities have never shied away from enforcement action.

The state’s principal financial regulator, the Texas State Securities Board (TSSB), has a long history of interacting with the market.

But only in 2023 did the real, even anomalous, appetite for regulation arise among Texan lawmakers.

While the resolution doesn’t have any concrete effects or legal power, it provides a picture of the sentiment among certain lawmakers.

The mining bill

Senate Bill 1751 started its legislative journey in early March. In a top-down fashion, it passed through the Senate and will now be considered by the House of Representatives State Affairs Committee before heading to the first vote in the lower chamber.

According to the bill, from September 2023, crypto mining facilities’ share of total energy demand should be capped at 10%. However, it only applies within the framework of a state program that compensates load reductions amid extreme events like heat waves or winter storms.

What that effectively means is that miners, which currently sell energy back to the grid at a premium when it needs it, will be unable to do so amid the growing energy demand from the industry.

“We’re trying to produce all this new power. We’re going to have a lot of this new power taken up by virtual currency mining. And then we’re going to pay them to go off the grid at different times, which I believe is a part of their business model.”

What’s next?

The co-founder of the Web3-project Ecosapiens, Nihar Neelakanti, is not so sure that the “seemingly anti-Bitcoin” mining bill would be “all that detrimental” to most miners in the state “given that they would likely fall below the energy threshold laid out in the bill,” he told Cointelegraph.

Currently, the Texan power grid can provide 92 gigawatts at the maximum. Should it not raise its capacities in the next three years, crypto mining could be taking the lion’s share of Texan electricity generation, in which case the 10% cap would cut the miners from the incentives program.

Speaking to Cointelegraph, Fred Thiel, the CEO of the crypto mining company Marathon Digital Holdings, said that owners of peaker gas plants heavily backed Senate Bill 1751. They need electricity during peak demand and regard Bitcoin miners selling the energy back to the grid as competition. However, he is quite optimistic about the bill not becoming law:

“It would have been detrimental to our industry, but it seems clear this bill is likely not going to pass in the state house.”

Thiel also highlighted the pressure at the federal level makes it harder for states to adopt pro-Bitcoin policies.

Zachary Townsend, CEO of Bitcoin-friendly insurance provider Meanwhile, seemed to agree, telling Cointelegraph that federal authorities are taking a hardline approach to the industry at the regional level. However, he highlighted that there is still progress at the state level:

“There’s Wyoming and Tennessee, as well as blue-leaning states like Colorado. That might be something similar to how the marijuana debate has played out at the state level — you basically have had states crafting their own rules and regulations that, at times, were contradictory to federal rules and regulations.”

In the middle distance, the reciprocal process of federal pressure and local autonomy could converge both poles into some kind of middle ground. Until then, the wrangling will likely intensify at the state level. And Texas, in Townsend’s opinion, seems to be ground zero for this debate.

It , along with to follow, and pushed Arise Bank — a self-described “first ever decentralized banking platform” — out of the state for

In 2022, the TSSB actively participated in enforcement action against collapsed crypto exchange FTX, pushing charges against co-founder Sam Bankman-Fried, who advertised the platform, and objecting to the potential sale of Voyager Digital to FTX even .

Texas also had its fair share of controversy in attempts to regulate crypto. In 2019, local lawmakers introduced a bill requiring users when using digital currencies. However, the bill never made it past the reading.

House Bill 1666, which was by a group of lawmakers led by Representative Giovanni Capriglione, proposed to amend Section 160 of the Texas Finance Code, restricting large digital asset providers — with 500+ customers and at least $10 million of funds — from comingling the customer funds with any other type of operational capital. The bill reached Senate approval in three and a half months and was sent to the Governor’s office in May.

In early March, Representative Cody Harris introduced a resolution to “express support for protecting individuals who code or develop on the Bitcoin network.”

Texas lawmakers also introduced a bill to create a , the idea being that once a person purchases a certain amount of the digital currency, the comptroller would use the money received to buy an equivalent amount of gold.

Dramatically presented by as an “anti-Bitcoin bill” or a “hammer” in the hands of lawmakers, the initiative, in fact, only revokes some artificial incentives, which the mining companies have been enjoying alongside some of the lowest energy prices in the country.

Also, some mining companies would stop receiving a reduction in state taxes for participation in this program. One of the bill’s sponsors, Senator Lois Kolkhorst, was quite about the reasons behind the initiative:

However, Neelakanti’s observation might become outdated relatively soon. To believe the unnamed source from the Electric Reliability Council of Texas in an article by The Verge, crypto mining is set to add 27 gigawatts of demand to the grid by 2026.

This article first appeared in Cointelegraph, written by

🪙
already passed in the State Senate
became the first state
recognize cryptocurrencies under commercial law
top five states for crypto
in the world
China’s crackdown on crypto mining
enjoying the interest
welcoming new businesses
relocating rigs to Texas
didn’t turn off mining operators
big electrical demands on the grid
an “oasis for Bitcoin.”
accused Bitconnect of illegal securities trading
31 other companies
using the word “bank.”
scrutinizing “finfluencers”
before the latter’s bankruptcy
to identify themselves
first
introduced in January
urging fellow lawmakers
state-based digital currency backed by gold
some in the crypto community
clear
cited
David Attlee