Only Two Businesses so Far Used Bitcoin to Pay Taxes in Ohio, State Treasurer Reveals

Since Ohio became the first state in the US to accept bitcoin, the flagship cryptocurrency, for tax payments, only two businesses have reportedly used the cryptocurrency to pay their taxes. This, according to state treasurer Robert Sprague.

Sprague revealed the stats while speaking at a forum organized by the Ohio State Associated Press earlier this month, where he took on questions about the department’s experience accepting BTC payments for taxes. After noting only two businesses used the option, available through the state’s official crypto payment platform, he added:

We’re reviewing how [the program] might be either curtailed or might be expanded, and what our counter-party risk is with that vendor.

While a spokesperson declined to reveal how much the state has received in bitcoin through the program, citing that such information can’t be revealed over financial confidentiality, pro-crypto firm Overstock has revealed it would pay a “portion” of its taxes using BTC.

The slow rate of adoption has seemingly not deterred the state, as it’s still looking to become a major blockchain industry hub. The state revealed it was going to start accepting bitcoin for tax payments in November of last year, in a move headed by its then state treasurer Josh Mandel, who at the time noted it would help Ohio stand out in crypto adoption, adding:

I do see [bitcoin] as a legitimate form of currency.

According to Bitcoin Magazine, businesses have to go through three steps to pay taxes with BTC in Ohio. The first sees them register with the Office of the Ohio Treasurer, while the second one requires them to enter their tax details on the platform, so they can pay using a compatible bitcoin wallet – these include BRD, Mycelium, and the Bitcoin Core client.

The payment is then processed by the Atlanta-based crypto payments processing firm BitPay, and converted into US dollars that are sent to the state treasurer’s office.

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Analytics Firm Tradeblock Predicts Bitcoin Mining Costs Over $12,500 Following Halving

Michael LaVere
  • Analytics firm Tradeblock estimates the cost of mining a single bitcoin to be over $12,500 following May's halving.
  • Increasing hash rate and reduced block reward will force miners to sell at higher break-even costs. 

Blockchain analytics firm Tradeblock estimates that the cost to mine bitcoin will rise to over $12,500 following May’s halving event. 

According to the report , May’s halving event, which will reduce the supply of newly minted bitcoin by 50%, will significantly increase the breakeven cost for miners. Tradeblock researchers estimate that commercial mining operators were able to achieve a healthy profit margin throughout most of 2019, with the rising competition in hash rate corresponding to an increase in bitcoin’s price. 

The report reads, 

Network hash rate has continued on a record run, making new highs nearly each week [...] As resources dedicated to mining rise over time, efficiency gains and/or mining costs rise. As such, in order to maintain healthy profit margins for miners, a rising hash rate is typically needed to correspond with a rising bitcoin price.

Tradeblock reports the current breakeven cost for bitcoin miners to be around $6800 using Bitmain’s Antminer series. However, the analytics firm claims that cost will increase to over $12,500 following May’s halving from a combination of rising hash rate and reduced mining reward.  

Tradeblock says miners are anticipating bitcoin’s price to increase in order to cover their operating costs, 

Our estimated breakeven costs indicate that miners are continuing to increase resources towards the network despite what is set to become a cost (per mined btc) increase following the halving. This suggests that miners are likely expecting the price of bitcoin to rise to higher levels (above ~$12,000-15,000 per BTC) around the halving allowing them to continue to generate a profit.

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