I think that we have seen this type of thing before. Years ago, everyone was trying to go to upstate New York, Washington state and Canada for cheap hydroelectric power.

All of those jurisdictions made great deals to miners, only to rug pull later.

The end result was hashrate left those areas and went to where it was treated better. This is devastating for institutional type miners as they consolidate a lot of hashrate into one location and often build large facilities that can’t be moved.

However, smaller container-based miners were able to move to friendlier jurisdictions. I’m in rural Missouri, which recently passed legislation to protect mining and I’m already getting inquiries from people considering leaving Texas.

Things can recover a lot faster than people think too. When China actually banned bitcoin mining, everyone was saying it could be a year before hashrate recovered, and it was only a few months.

In the United States with states rights, it will be difficult to implement any kind of blanket ban at the federal level and therefore there will always be pockets of miners in some jurisdiction mining sats to provide liquidity. I also believe that peer to peer transactions in person would become more prevalent in this type of environment.

It ultimately would not work, but they will definitely try as we saw during Covid. The thing that concerns me the most is that many people do not know how to take self custody and mining pools themselves are an easy target.