Background:
Bitcoin mining is a quickly growing industry across the United States. But with this growth has also come large amounts of misinformation about the industry and how it functions. In addition, bad actors have often left a bad taste in local government mouths as companies have built mining facilities often without proper safety features and noise reduction methods–only to leave a few months later.
These bad actors are causing a variety of issues for the Bitcoin mining industry. Their actions, especially around noise and safety, have led to calls for local bans of mining facilities and even states to push for complete moratoriums on the industry.
Solution:
Like industries before it, the best way to address bad actors is to articulate and enforce industry best practices to differentiate good actors from the bad ones. Voluntary standards have a long history of success including from the American Petroleum Institute to the Motion Picture Industry of America. These standards were adopted to protect both the industry and community from bad actors and to create best practices in the industry.
Although there are a variety of blockchain groups, no groups have yet to focus on miners enough to come up with and work to impose these standards.
Due to the success of the Arkansas Blockchain Council in bringing miners together, we can serve as the tip of the spear in working to develop and introduce industry standards in Arkansas to differentiate good from bad actors.
In fact, any crypto miner seeking membership in the Council must, as a first order of business, meet these standards.
Standards:
The standards that need to be developed must address the real-world concerns that local and state governments have about Bitcoin miners. These concerns have included the following:
- Bitcoin miners use too much energy/ will cause grid blackouts
- Bitcoin miners are too loud and will cause problems for neighbors
- Bitcoin miners will declare bankruptcy and leave
- Bitcoin miners are a fire hazard due to energy use
- Bitcoin miners are run by the Chinese Communist Party or another foreign hostile actor
To address these issues, membership certification includes the following:
- Be a good neighbor.
- The Bitcoin miner must maintain compliance with all electrical regulations and safety guidelines by employing accredited engineers.
- Bitcoin miners meet local sound requirements and produce no more than 60 decibels of sound at their property line. Must be responsive to complaints and resolve issues to community satisfaction.
- Bitcoin miners are zoned properly for the land in which they have constructed their facility.
- The Bitcoin miner has on their website the contact information of a competent individual who is working at the mining facility up for certification, with current email and phone number.
- The company at the mining facility has not previously abandoned a mining facility.
- The company must pass a rigorous background check from invested State and Federal third-party entities, including the Attorney General and FBI cybercrime division.
- Organization must disclose ownership over 10% to the Council. This helps combat money laundering, sanctions avoidance, black market diversion, and multiple other issues.
The safety audit must be performed by a 3rd party to ensure that the miner is meeting the highest standards. However, other pertinent information can be verified by the Arkansas Blockchain Council.
This information will be kept in a database and will be verified and updated each year to assure its still in compliance.
The cost of obtaining the certification shall be the cost for the 3rd party audit plus a stated amount for the verification from the Arkansas Blockchain Council.