BT Daily News: Colorado Becomes First State to Accept Bitcoin for Tax Payments
1. Colorado Becomes First State to Accept Bitcoin for Tax Payments
In a new first for bitcoin adoption by governments, Colorado has officially become the first U.S. state to allow citizens to pay taxes in bitcoin (BTC).
This policy took effect on September 1, 2022, claiming that moving forward, all state taxpayers will be allowed to use cryptocurrency to pay a wide variety of different types of taxes, specifically including “individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax.” The notice also states that, although cryptocurrencies will be legal tender for the payment of these taxes, the state will only issue refunds in U.S. dollars.
In a somewhat odd move, the Colorado Department of Revenue announced these changes in late September, several weeks after the payment protocols had been updated. This move is a first in terms of bitcoin acceptance within the United States, in an environment where both local and federal legislatures have been gradually more willing to accept the radical economic possibilities of the cryptocurrency. This is not the first time that a U.S. state has released a pilot program for bitcoin tax payments, but it is certainly more far-reaching.
Ohio made a tentative step toward bitcoin payments in 2018, giving the green light for certain taxes to be paid with bitcoin. However, in addition to being bitcoin-specific, this initiative was drastically different from Colorado’s new program in one key way: This payment method was only available to businesses. Hopefully building from the mistakes of Ohio’s early plan, Colorado allows both business and private taxes to be paid with bitcoin and other types of cryptocurrencies. Within a few months of Ohio’s experiment, adoption levels were abysmal, and the system was decommissioned before it reached one year of use. And even this experiment got farther than previous attempts, which never made it through committee!
2. How bitcoin miner CLEANSPARK keeps building in the bear marketIt’s no secret that the bitcoin bear market is bad right now. According to some metrics, it’s one of the worst downturns in Bitcoin’s young history. And few sectors of the Bitcoin economy are as harshly affected by current market conditions than miners. But bear markets are precisely when mining winners are separated from losers: The agile and smart teams build and survive as the overleveraged and unprepared teams fall prey to an adverse environment.
One company that has continued to grow, acquire and build through the bear market is CleanSpark, a publicly-traded bitcoin mining company based in Nevada. This article highlights some of the moves this team has made over the past several months, contextualized with a bit of the brutal state of the mining market, making CleanSpark’s planning and execution all the more impressive and notable.
Plenty of mining companies act as “press release heroes” by announcing and planning to grow but often failing to execute on schedule or at all. But since its first foray into the mining sector in December 2020, CleanSpark has since grown to 100 employees and 3 exahashes (EH) of online hash rate, with the hash rate tripling in the past year alone.
CleanSpark has also been on a sustained shopping spree for mining hardware even as market conditions worsened — or perhaps because of this. The company bought 4,500 Antminer S19s last October and 2,597 more the following month. In June, it bought purchase contracts for 1,800 Antminer S19 XPs. In July, the company scooped up 1,060 Whatsminer M30S. In August, it bought 3,400 more Antminer S19s, followed by an additional 10,000 Antminer S19j Pros in September.
CleanSpark has also been closing new deals, partnerships and acquisitions almost every month this year, including $35 million in new financing (April), a partnership with TMGcore (June), a co-location agreement with Coinmint (July), an 86-megawatt (MW) mining facility acquisition in Georgia (August), and acquiring a turnkey mining site from Mawson (September).
3. The path moving forward for ex-Ethereum miners remains unclearIt’s been nearly two weeks since Ethereum made its historical transition from proof-of-work (PoW) to proof-of-stake (PoS), and some ex-Ether (ETH) miners say they remain clueless on how to move forward.
Twitter user BakaMoriDesu suggested in a tweet that ex-eth miners were just going to move on to the next profitable coin, adding, “As an RVN miner, I doubt it will be profitable after the halving anymore.”
Former miner Christian Ander: “To be honest, I don’t know myself yet. Selling GPU power to other computing intense services is far from as profitable as ETH was.”
“I am doing research myself and my partners are looking into options,” Ander added, noting, “GPU owners are doing research and selling power to non-crypto projects. And when the energy prices are very high, they shut down and sell excessive power to the grid.” Ander said that he’s currently not mining any crypto and is just evaluating the market.
Another ex-Ethereum miner, Kevin Aguirre, he had sold his hardware to his partner, who was now using it to mine other coins, noting: “I do have some regret in my outcome with my mining machine, but in the end, it supported me and my family through the pandemic.”
4. Innovation will drive NFT adoption despite mainstream presence: NFTGo founderThe presence of big players in the nonfungible tokens market might evangelize newbies, but they do not lead to mass adoption or innovation, claimed Tony Ling, co-founder of NFTGo in a conversation.
Major developments, such as Adobe's acquisition of Figma, would potentially impact creators per the combination of both the companies' features. Adobe, for example, owns Behance, a creative showcase platform that allows users to connect crypto wallets and NFTs to their profiles, while Figma provides kits for NFT creators.
The mainstream presence in the space, however, isn't seen as a game changer, as the industry faces challenges with high royalty fees and a bear market — as seen by the recent 20% staff layoff at OpenSea. "Key innovation must happen in the new center, not some existing big unicorns", added Ling.
Blockchain adviser and Bundlesbets.com CEO Brenda Gentry shared a similar view, noting that she believes the "industry will always adapt and find new tools", regardless of the players in the market.
5. Russia aims to use CBDC for international settlements with China: ReportRussia is reportedly planning to use the digital rouble for mutual settlements with China by next year. The digital rouble is currently being tested for settling with the banks and is expected to be completed by early next year.
The United States Treasury Department added 22 individuals and two Russia-based entities to the sanction list in the third week of September. With the growing sanctions against Russia from the West in the wake of the ongoing conflict with Ukraine, the country has been actively looking for alternate financial routes and trade settlements.
Anatoly Aksakov, head of the finance committee in Russia's lower house of parliament, recently admitted that the geo-political crisis has limited Russia’s accessibility to the international trade market. This is why they have been actively working for alternate modes of payment and trade settlements, and national digital currency seems to be the primary choice at the moment.
Russia has joined the growing list of countries that are in the final phase of their CBDC development. According to the Bank of Russia’s latest monetary policy update, the authority will begin to connect all banks and credit institutions to the digital rouble platform in 2024.
The reports of the use of the digital rouble for mutual trade settlements in the international trade market come within a week of reports that hinted at possible crypto use for cross-border payments.