New York Lawmakers Approve a Moratorium on Bitcoin Mining

New York state’s Bitcoin mining boom hit a snag when the state Senate passed a bill that will halt new permits for certain fossil fuel power plants to be used for Bitcoin mining. The measure, which also initiates a study on the environmental impact that mining facilities are having in the state, was approved in the State Assembly earlier this year. By promising new jobs, the crypto industry had divided Senate Democrats on whether the moratorium would have higher environmental or economic costs. The talks languished late into the night as the state Senate neared its legislative deadline. The bill will face another test as it heads to Gov. Kathy Hochul for her to sign or veto. Hochul received a $40,000 donation last month from a CEO of a company that runs a former aluminum plant converted into a crypto mining facility, The New York Times recently reported. That resurgence of fossil fuels has sparked a backlash. After China instituted new restrictions on bitcoin mining last year, many mining operations have been established in the US New York, with abundant hydroelectricity and fossil fuel plants. withdrawals that can be reset to mine Bitcoin, quickly became a new hub for Bitcoin mining. That resurgence of fossil fuels has sparked a backlash from some residents and environmental advocates. They worry that the revived fossil fuel plants, with the help of Bitcoin, will damage ecosystems and derail state efforts to address climate change. The bill brought forward today places a two-year moratorium on any new permits for cryptocurrency mining operations that use a particularly power-hungry approach to verifying transactions on the blockchain. The approach, called proof-of-work, supports the two largest cryptocurrencies: Bitcoin and Ethereum. With proof-of-work, β€œminers” use special hardware to solve complex puzzles, and in return they get crypto tokens. The process consumes a lot of energy. If the Bitcoin network were its own nation, it would rank 32nd in the world (right between Argentina and the Netherlands) in annual electricity use. That energy demand is a threat to climate goals set by New York State in 2019, which committed the state to an 85 percent reduction in greenhouse gas emissions by 2050. The Greenidge Generating Station in the region New York’s Finger Lakes has become a particular hotspot for residents. concerned about the impact of cryptocurrency mining on the environment. Greenidge, which started out as a coal-fired power plant, was renovated to run on gas and became a nearly full-time Bitcoin mining operation in 2020. The moratorium on Bitcoin mining does not apply to Greenidge as it is focused at fossil fuel power plants submitting new requests for permits to use energy to mine cryptocurrencies based on proof of work instead of sending that energy into the grid. The bill also does not stop any operations running on renewable energy or using a less energy-intensive alternative to proof-of-work that many other cryptocurrencies use to verify transactions.


Table of Contents