What are right-to-mine laws and how do they affect BTC miners?

Several US states have introduced and passed Right to Mine laws to protect the Bitcoin mining industry, recognizing the economic benefits that cryptocurrency mining can bring to their economies.

Read on to learn more about Right to Mine laws, their key provisions, how they will affect Bitcoin mining, and the challenges they face in the implementation process.

What is right on mining laws?

Cryptocurrency Right-to-Mine bills are a set of laws from different jurisdictions in the United States that advocate for the rights of cryptocurrency miners and prohibit predatory practices such as overcharged electricity charges. These bills have already been enacted in states such as Montana, Mississippi, Oklahoma and Arkansas.

Right-to-mine bills have allowed miners to override local governments’ right to employ zoning laws intended to limit cryptocurrency mining operations.

Texas welcomed the large migration of hashrates from China after the People’s Republic banned crypto operations in 2021. Since then, the state has embedded several crypto-friendly laws in its constitution that apply to residents who generate, use and store bitcoin.

These laws led to an influx of crypto mining operations set up in Texas, and in 2023, state lawmakers passed two more bills that provided support for cryptocurrency miners.

The first bill, SB 1929, required miners consuming more than 75 megawatts to be registered with the Public Utilities Commission (PUC) in Texas, which will then share data with the Electricity Reliability Council of Texas (ERCOT), a grid operator tasked, among other things, with electricity loads from to manage energy-intensive companies’ electricity consumption.

The second bill, HB 591, introduced tax exemptions for businesses that use what would otherwise be wasted gas. These and other laws passed in Texas and other US states aim to eliminate limiting factors facing Bitcoin mining operations.

Which states have passed right-to-mine crypto accounts so far?

Right-to-mine crypto laws are being discussed in several states in the United States.

The states of Arkansas and Montana passed their Right to Mine bills in 2023 with the help of the Satoshi Action Fund, an educational organization dedicated to informing regulators and policymakers about the benefits of Bitcoin mining.

Through each of the bills, state lawmakers sought to create suitable laws to protect miners from predatory electricity charges, zoning laws intended to prohibit mining operations in certain areas, and overtaxing.

For example, Montana’s Right to Mine laws prohibited the addition of any taxes to bitcoin when used as a payment method. Mississippi also passed a similar bill in February 2023, making it legal for businesses and individuals to operate nodes for Bitcoin mining at home and in a business setting.

In Oklahoma, a bill to protect Bitcoin rights was passed in May 2024. However, the bill will take effect in November 2024. Besides supporting Bitcoin mining, the bill promises the right to self-preservation, allowing people to keep their crypto assets safe. The bill also allows Bitcoin and other cryptocurrencies to be used for transaction purposes without additional taxes.

How will right-to-mine laws affect Bitcoin mining?

Right-to-mine bills that have passed all have one theme: to protect miners and ban punitive regulatory practices that limit Bitcoin mining.

This means Bitcoin miners will be legally protected to mine Bitcoin commercially and at home, helping to create widespread adoption of the digital asset.

Arguably, Right to Mine laws could also pave the way for the creation of more universally accepted laws around cryptocurrency mining and use. This could have a very positive impact on the crypto sector as a whole, paving the way for new capital to flow into the industry.

Challenges Facing Right-to-Mine Bitcoin Laws

Although several jurisdictions have begun to adopt Right-to-Mine Bitcoin laws and more are expected to join, the bill still faces some challenges.

The two major challenges facing Right-to-Mine accounts are Bitcoin mining’s high energy consumption and noise pollution.

Bitcoin mining and the transition to clean energy

One of the challenges facing the Right to Mine Bitcoin laws is an issue raised among clean energy campaigners who claim that Bitcoin contributes to global carbon emissions.

Bitcoin uses the proof-of-work consensus mechanism, which has always been energy-intensive, as it requires a lot of electricity and computing power to perform the hashing operations. Due to the high electricity consumption, Bitcoin mining also contributes to global carbon emissions.

N ONE study conducted between 2020 and 2021 revealed that Bitcoin mining globally emitted more than 85.89 Mt of CO2. As such, laws aimed at protecting cryptocurrency miners through the Right-to-Mine bills have faced backlash from environmentalists.

Complaints by neighborhoods about noise from Bitcoin mining installations

In addition to the energy consumed by Bitcoin mining installations, they can also be quite noisy.

Bitcoin mining requires high-powered, special computers that are operated all day, every day. With thousands of computers running simultaneously, Bitcoin mining causes noise pollution. The sound levels of a mining rig are said to be between 70 and 9 decibels.

People living near mining facilities have also described the noise as ‘like a jet engine idling on a nearby tarmac’. Despite the level of noise pollution caused by Bitcoin mining, Right-to-Mine laws would make it illegal for neighborhoods to enjoy zoning ordinances, as they would run afoul of the bill.

What is the model bill on right-to-mine by the Satoshi Action Fund?

The Satoshi Action Fund published the model Right-to-Mine bill that protects Bitcoin mining.

The bill protects commercial crypto-mining activities from local regulations and oversight. The model account (now dubbed The Blockchain Basics Act) has two main proponents:

A ban on areas to enact zoning and noise ordinances that protect neighbors from the noisy operation of crypto mining facilities.
Provisions prohibiting utility regulators from overseeing crypto-mining activities and setting relevant electricity rates that take into account costs, effects on other customers and risks to the grid.

Some states in the US have already passed their Right to Mine laws, while several others have proposed the same bill to their local state. The Satoshi Action Fund believes that the Right to Mine laws “will ensure that Bitcoin and digital asset technologies can grow and that innovation is able to flourish.”

The takeaway

Right-to-mine accounts will have a lasting impact on the Bitcoin mining industry and the crypto sector as a whole. The passage of these bills by different states could pave the way for a nationwide bill. Moreover, it could lead to more robust laws covering the issuance and use of cryptocurrencies.

As laws like these will legally protect Bitcoin miners, they will also help attract more crypto businesses, drive innovation and create economic opportunities.

While a few states have already passed right-to-mine laws, more states have introduced the bill to their Senate and are awaiting a vote.