The White House is pushing a proposal that could hurt cryptocurrencies. People write to senators

In yesterday’s article We have informed you about the positive progress regarding the correct definition of the important word “broker” in the closely watched “Infrastructure Bill,” which can greatly affect what is legal and what is not legal in the United States about cryptocurrencies.

The original amendment, presented on Wednesday by three U.S. Senators Ron Wyden, Cynthia Lummis and Pat Toomey, received strong support from a wide range of cryptocommunity, as the definition of “broker” was modified to address the aforementioned “Infrastructure Act.” did not concern cryptocurrency (PoW) miners, PoS cryptocurrency validators, software developers, node operators or authors of cryptocurrency wallets. Several crypto companies, including Coinbase, Coin Center, Ribbit Capital, Square and the lobby non-profit Blockchain Association, also identified with it.

The competitive proposal is of great concern

Unfortunately, the mentioned addition from the workshop of the mentioned three senators has had serious competition since last night. Senators Rob Portman and Mark Warner introduced their own amendment on cryptocurrencies “at noon”. And unfortunately, if it were their design, it would be a hard blow to the cryptographic industry in the USA.

Whether intentionally or not, the Portman-Warner design circumvents a substantial proportion of crypto-industry participants in the definition of a “broker.” Well, and given that they came up with it, and even though the amendment with which the crypotcommunity already existed, there is every indication that it is an attempt on their part to undermine the cryptocurrencies.

The problem is that Portman and Warren’s amendment to the definition of a broker excludes only cryptocurrency miners using the Proof of Work consensus a reseller of hardware and software designed for secure storage of cryptocurrencies with their own private keys.

He’s right.

– Senator Pat Toomey (@SenToomey) August 6, 2021

This means that their amendment does not mention Proof of Stake cryptocurrency validators, software developers, node operators and the like at all. This would mean that the Infrastructure Bill would directly affect them, and thus it would oblige these entities to report all data on completed transactions and users to the IRS (Tax Office). However, this is not impossible in practice. This could lead to the future of Proof of Stake cryptocurrencies in the US (or their validators) being seriously jeopardized (this may directly affect cryptocurrencies such as ETH or Cardano) and, in theory, the future of Lightning Network node operators or any clever developers who develop application solutions for crypto projects.

What is worse, according to the latest information, this proposal also has the support of the White House.

Late breaking – White House is coming out formally in support of Warner-Portman-Sinema crypto amendment, implicitly against the Toomey-Wyden-Lummis plan

– Jeff Stein (@JStein_WaPo) August 6, 2021

PoW preferred over Proof of Stake?

Another interesting feature of Portman and Warner’s amendment is that it clearly favors the Proof of Work consensus over the Proof of Stake consensus, which is curious, especially because many American politicians have blamed BTC for its non-environmental nature this year. If this amendment came into force, it would essentially allow BTC miners in the US to be one of the few in the crypto-industry to operate according to existing rules. On the contrary, it would significantly negatively affect the future of Proof of Stake cryptocurrencies, which are significantly more environmentally friendly in terms of energy intensity.

Ryan Selkis from Messari, however, sees a more insidious plan. He believes that through the “Infrastructure Bill”, the White House will first try to cripple the proof of stake cryptocurrency industry and then attack BTC, and its miners will restore issues related to the energy intensity of its mining and thus its negative impacts on nature.

Note: Our editors do not want to evaluate whether the Proof of Work or Proof of Stake consensus is better. We only point out the absurdity of the proposal, which clearly supports one consensus at the expense of another and, curiously, the one that politicians have strongly criticized this year.

Fight to the end

Many crypto-friendly politicians, as well as fans of cryptocurrencies as such, are currently fighting for an amendment from the workshop of Wyden, Lummis and Pat Toomey. This is confirmed by their great activity on Twitter.

For example, a senator Cynthiha Lummis it literally calls on people and “tweet” their elected representatives in the senate to call on them to support their proposal and not the one presented by Warren.

We NEED you. Pls call your Senators. Pls tweet. Pls email. We are facing major headwinds on the Wyden-Lummis-Toomey amendment. Burying financial innovation in red tape & sending devs + miners on info collection wild goose chases for info they don’t know is horrible policy.

– Cynthia Lummis 🦬 (@CynthiaMLummis) August 6, 2021

Due to the seriousness of the situation, he also called for contacting senators Jake Chervinsky, a well – known lawyer specializing in cryptocurrencies and blockchain technology, or Frank Chaparro from The Block. Both point out that in a vote where the proposal needs to get 50 votes, the proposal from the workshop of Lumis, Wyden and Toomey must be supported, otherwise it will be bad for cryptocurrencies.

Call your Senators tomorrow

– Frank Chaparro (@fintechfrank) August 6, 2021

Twitter, meanwhile, has been flooded with hundreds to thousands of tweets addressed to U.S. lawmakers.

What if the wrong scenario comes true?

But if the proposal that favors the White House passes, the fight will not end. There is already talk of attacking it in court, or of the possibility of introducing small codes of proof of work consensus into proof of stake projects as a form of some “sabotage”.

“If Senator Warner’s amendment to the Infrastructure Bill passes, it will be a huge blow to the United States and our ability to remain the epicenter of innovation in the world.” The proposed amendment recklessly imposes impractical reporting requirements on the shoulders of software developers and proof of stake validators. “ Andreesen Horowitz pointed out in its opinion.

We will probably find out after Saturday’s vote whether this type of lobbying by crypto-friendly companies and cryptocurrency fans will succeed. The final approval of the Infrascturcute Bill is tentatively scheduled for Tuesday.