“We encourage you to have interaction additional with bitcoin miners to higher perceive the matter usually and the results of your laws.”
This letter was initially printed on bitcoiner.ghost.io.
Expensive Senator Kolkhorst,
As native Texans, we’re writing to precise concern concerning Texas Senate Invoice (SB) 1751, which you co-sponsored and which lately handed a Enterprise & Commerce Committee vote on April 5, 2023. This open letter follows a personal enchantment submitted by way of your workplace in March. We write as involved Texas residents who’re unbiased and don’t symbolize any firm or foyer.
From the skin trying in, you appear to be a proud Texan who fights for the rights of all Texans, selling liberty and freedom in keeping with Texan values. SB 1751 is a notable departure, no less than in vital facets, out of your previous monitor file. It’s misinformed, discriminatory, anti-competitive, dangerous to the pursuits of grid stability, unhealthy for shoppers and a strategic setback for Texas.
For context, the invoice considerations “digital forex” mining and demand response. It seeks to restrict the flexibility of bitcoin miners to take part in compensatory ERCOT packages, which incentivize load discount, to 10% throughout all bitcoin miners in whole. Previous to sponsoring SB 1751, it’s unclear whether or not you engaged in discussions with bitcoin miners to higher perceive the matter or expressed any opinions on bitcoin or bitcoin mining in any respect. It’s also unclear whether or not particular pursuits lobbied for this invoice, given you don’t seem to have beforehand taken any positions on bitcoin, however on the deserves alone, SB 1751 is problematic.
Misinformed
The invoice considerations “digital forex mining as demand response.” Actually at situation is bitcoin, not “digital forex” broadly. There aren’t any miners of any forex aside from bitcoin that might be of be aware taking part in demand response packages or selling grid reliability. Bitcoin can also be definitionally not corresponding to some other forex, and it’s not digital. Bitcoin is just not “crypto”. Bitcoin is bitcoin, and if bitcoin is on the coronary heart of your invoice, a greater understanding earlier than legislating can be helpful.
Bitcoin is a type of cash with a hard and fast provide, which is international and permissionless. There’ll solely ever be 21 million bitcoin. That’s the foundation of its worth to the world. As was obvious from a current tweet, you appear to acknowledge that inflation is an issue. Inflation is just not a political phenomenon. Cash is created by the Federal Reserve (“Fed”). The Fed has elevated the cash provide by $8 trillion, or 8x for the reason that Nice Monetary Disaster, which causes inflation and destroys financial savings. Bitcoin is designed to repair the issue of cash printing, however nothing of worth comes with out value. Bitcoin’s 21 million mounted provide is secured by power, particularly energy. In brief, power innovation has at all times been strategic to Texas. Vitality is strategic to bitcoin and bitcoin will turn out to be more and more strategic to Texas because of this. Nonetheless, it’s not nearly energy era and demand. It’s in regards to the issues of printing cash, which undermine the pursuits of all Texans and the state of Texas.
Texas is a frontrunner in power and all Texans want a type of cash that the federal government can’t print out of skinny air and without charge. Texas energy is securing the bitcoin community, which not solely promotes grid stability and creates jobs and financial growth, nevertheless it additionally secures the pursuits of all Texans, even those that don’t but use bitcoin as a superior type of cash. We’d be glad to listen to your considerations and talk about this in additional element if it could be worthwhile.
Discriminatory
SB 1751 singles out bitcoin miners from all different industries. Setting every part else apart, that is discriminatory and creates an unlevel enjoying area. Whereas different sources of demand have been recognized as vital infrastructure, no different business, together with battery operators, have been restricted. Why bitcoin mining?
Anti-Aggressive
Bitcoin miners compete in varied ancillary companies which ERCOT makes use of to compensate versatile masses to make sure grid stability. The entrant of bitcoin miners has made the bidding course of extra aggressive, decreasing costs. Proscribing the flexibility of bitcoin miners to take part is anti-competitive and can lead to marginally much less participation in ancillary companies by bitcoin miners which can marginally improve value for ERCOT to realize its reliability mandate.
Dangerous To Grid Stability
SB 1751 disincentivizes bitcoin miners from taking part in ancillary companies, which promote grid stability. Extra participation in ancillary companies not solely reduces prices but in addition permits for ERCOT to have extra sources at its disposal to realize grid stability. As Texas energy demand grows, extra versatile sources shall be wanted to realize grid stability. Why disincentivize massive versatile masses, that are most frequently extra environment friendly and decrease value than utilizing peaker vegetation?
Dangerous For Customers
Entry to ancillary companies creates marginal financial incentives for miners to return to Texas. Over time, extra miners in Texas will result in extra energy era, extra demand response and extra participation in ancillary companies. All three, individually and in combination, promote cheaper and extra secure energy costs for all Texas shoppers.
Strategic Setback For Texas
As a result of fundamentals of power growth and as socialist-leaning states like New York have restricted mining, there was a big shift of bitcoin mining to Texas. From a mining perspective, Texas is named the “middle of hash.” Austin can also be an rising hub for bitcoin growth. SB 1751 sends loud indicators that Texas is just not the free, deregulated market everybody believes it to be and that the state of Texas is antagonistic to bitcoin broadly.
Bitcoin mining incentivizes low-cost energy and its distinctive capacity to reply at scale to all different sources of energy demand helps obtain grid stability way more successfully and effectively than some other single useful resource. Willingness by miners to close down and NOT mine bitcoin within the curiosity of grid stability is a profit to ERCOT and all Texans, which shouldn’t be economically disincentivized or deprived relative to different industries. Mining tasks are additionally extremely capital intensive. Rash legislative motion can have fast impacts in dissuading miners to pursue massive, long-term capital tasks in Texas.
Even should you may not be involved with its broader significance, this laws will hurt Texas strategic pursuits, past simply ancillary companies.
Enchantment To Purpose And Reasonability
Earlier than transferring ahead with dangerous laws, we encourage you to have interaction additional with bitcoin miners to higher perceive the matter usually and the results of your laws particularly. Pausing work on SB 1751 is the one smart and affordable course. Please don’t shoot and intention later. Moreover, we might ask that you just have interaction with the Texas bitcoin neighborhood to grasp the significance of bitcoin and why it’s strategic to Texas and all Texans.
Bitcoin wants no favors nor aggressive benefits. It simply shouldn’t be topic to regulatory discrimination. The rights of Texan bitcoin holders, together with miners, needs to be protected. Home Concurrent Decision (HCR) 89 sponsored by Cody Harris, Texas Home of Representatives, District 8 is a good instance. It goals to guard the rights of Texan pursuits in bitcoin, quite than advantaging bitcoin in any means. That’s all we ask of you and your colleagues.
It’s clear you’re a proud Texan and your values align with the ethos of bitcoin. Most significantly, we merely want you to have interaction with the citizenry previous to legislating. However relaxation assured, no matter the way you proceed, every part is sweet for bitcoin, which is a principle formally recognized in Keynesian economics because the Nakamoto Paradox. If you want to debate SB 1751 or bitcoin extra usually, we’re in Austin or would come to Brenham. Godspeed.
“Govern properly and as little as attainable.”
-Sam Houston
Greatest,
Parker A. Lewis
Will C. Cole
It is a visitor put up by Parker A. Lewis and Will C. Cole. Opinions expressed are totally their very own and don’t essentially replicate these of BTC Inc or Bitcoin Journal.