SAB 121 House Joint Resolution
This bill is very pro-crypto.
voted for
Mike Rounds
Republican Senator from South Dakota
Notable statements
Mike Rounds
@SenatorRounds
The first person to win a block gets a prize of bitcoins. Since the second step in forming a block is essentially up to chance, the most effective way to mine is simply to throw more computation at the problem, verifying as many blocks as possible as fast as possible.
Neutral on crypto
Mike Rounds
@SenatorRounds
Software developments, however, mean that they don’t need to bother with masks and voice modulators. They can issue a ransom and request payment with a cryptocurrency (CC) (like bitcoin) rather than exchange a briefcase full of cash.
Neutral on crypto
Mike Rounds
@SenatorRounds
This means that, as bitcoin gets more valuable, more people mine, mining gets harder, it takes more computations and more electricity to mine a bitcoin. Some of you may be familiar with @elonmusk recent statement about bitcoin’s carbon footprint.
Neutral on crypto
Mike Rounds
@SenatorRounds
In short, the more miners there are, the harder it is to mine bitcoins. Since the best way to mine is to simply use more computations, there is an incentive to pool as much effort into mining as possible, simply to make sure your pool has an advantage over other miners.
Neutral on crypto
Mike Rounds
@SenatorRounds
This blockchain of transactions forms a distributed ledger that is difficult to modify and easy to verify (in theory); a ledger that is maintained collectively on a network with specific protocols to verify each new block in the chain, meaning that bitcoin exchanges are secure.
Neutral on crypto
Mike Rounds
@SenatorRounds
The interesting thing is that you can make it easier or harder to form new blocks if you make the nonce higher or lower. And for bitcoin, the difficulty is adjusted every 2016 blocks so that the rate of formation of new blocks is constant.
Neutral on crypto
Mike Rounds
@SenatorRounds
So how does this relate to Colonial Pipeline? Bitcoins only exist as data. They can be tied to digital wallets rather than a specific person’s identity, which means people believe they can receive and spend them anonymously- perfect for secret transactions like ransoms.
Somewhat anti-crypto
Mike Rounds
@SenatorRounds
Some people decided that, if the commodity backing a currency doesn’t matter, then why should money need to be a physical object and why should you need a government (or bank) to back money? From there, some programmers started developing cryptocurrencies (CCs).
Somewhat anti-crypto
Mike Rounds
@SenatorRounds
These protocols revolve around cryptography (for computers, this is the use of math to code information) hence “crypto”currencies. However, someone needs to actually verify each new block in the chain to keep the system running smoothly.
Neutral on crypto
Mike Rounds
@SenatorRounds
In short, mining a new bitcoin is a two-step process. First, you need to verify a block’s worth of transactions, then you need to guess a hash (a number). Your guess is compared to a target (called a nonce) and if your guess is below the nonce then you form a block.
Neutral on crypto
Mike Rounds
@SenatorRounds
Despite the randomness, it's more like they’re getting paid a fee to maintain ledgers than mining or creating bitcoins. Miners provide proof that they’ve done work to contribute to the chain in exchange for compensation (in bitcoins), rather than making bitcoins themselves.
Neutral on crypto
Mike Rounds
@SenatorRounds
Since #bitcoins are decentralized, there isn’t a government or bank to maintain the system, which means there needs to be a different way. People who verify transactions are bitcoin miners, and the process of verification is fundamental to how they make (or mine) new bitcoins.
Neutral on crypto
Mike Rounds
@SenatorRounds
Using bitcoin as an example: bitcoins exist in digital ledgers, but to prevent fraudulent exchanges, transactions are recorded in encrypted blocks. Each block points at the previous block and has a timestamp. Go where each block points and you get a chain, called a “blockchain”.
Neutral on crypto