Peterson: Mississippi Should Embrace Bitcoin Mining

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Below is an opinion column from Eric Peterson:

Magnolia State can grow its economy and even solve an environmental problem to boot.

An indistinct warehouse in Jackson doesn’t appear to be part of a growing new tech industry in Mississippi, but inside are specialized computers that are creating jobs and opportunities across the state.

The 300,000 square foot warehouse is stacked with hundreds of computers and the proper electrical infrastructure to ensure they can operate 24/7 for a booming industry in mining the Mississippi bitcoin.

Bitcoin mining, which uses computers and large amounts of electricity to record Bitcoin transactions and secure the Bitcoin network, has dramatically increased its footprint in America over the past two years. This increase is mainly due to China banning the technology as it pushes for the adoption of its own digital currency.

Today, nearly 30% of Bitcoin mining takes place in America, with states like Texas, Georgia, and Kentucky leading the way.

But as the industry continues to look for new places to expand, states like Mississippi stand ready to take advantage.

Mississippi has many of the major components needed to attract Bitcoin miners, along with the jobs they create and the taxes they contribute to the state. Bitcoin miners are looking for large spaces to house their computers and, above all, cheap energy to run them. This makes Mississippi’s many abandoned industrial facilities prime targets for Bitcoin miners.

The Mississippi Senate Finance Committee recently heard two bills that would further incentivize the Bitcoin industry to relocate and expand operations in the state, SB 2603 and SB 2435, both by Senator Josh Harkins.

The first bill would accomplish a variety of house-cleaning duties for virtual currency in the state and provide important protections for the Bitcoin mining industry. For example, it would protect the right of Bitcoin miners to conduct industrial-scale mining operations in industrial-use areas.

Bitcoin miners are constantly worried about governments shutting down or putting additional control over their business model. These concerns have manifested themselves in particular in New York, which recently adopted a two-year moratorium on all bitcoin mining operations that do not use 100% renewable energy.

Local governments have also tried to shut down their business model, as seen recently in Murphy, North Carolina, where the county council got involved in the issue.

The legislation would also create a Bitcoin Mining Council to study the Mississippi industry and provide a long overdue definition of virtual currency in Mississippi law.

House Bill 848 by State Rep. Jody Stevenson, which has the same text as SB 2603, was withdrawn from committee on Jan. 25 and is currently on the House floor.

Meanwhile, SB 2435 seeks to leverage areas of Mississippi that are rich in oil and natural gas to mine Bitcoin in a way that creates jobs and cleans up the environment. Specifically, the legislation would allow bitcoin miners to use the methane currently leaking from abandoned oil and gas wells to mine bitcoin. In return, the Bitcoin miner would be responsible for sealing abandoned wells once their project is complete, an obligation that currently costs Mississippi taxpayers $50,000 to $100,000 per well. This legislation creates a win-win scenario for Mississippi taxpayers, the environment, and Bitcoin miners.

Mississippi is currently experiencing an explosion of new business investment thanks to its growth-friendly tax and regulatory policies. By applying these same principles to the Bitcoin mining industry, it can grow its economy and even solve an environmental problem to boot.

— Article credit to Eric Peterson, for the Magnolia Tribune —

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