New York lawmakers enact a new prohibition on Bitcoin mining

<strong>New York lawmakers enact a new prohibition on Bitcoin mining</strong>

The New York State Senate has passed a ban that will stop issuing new licenses for Bitcoin mining projects that rely on electricity generated by fossil-fuel power plants. 

This law will cut back the recent growth in the Bitcoin mining sector in New York. The bill was enacted by the state Assembly earlier this year.

In an attempt to reduce the environmental effects caused by the technology, the state Senate voted 36-27 to pass a two-year ban on all Bitcoin mines that depend on carbon-based energy sources.

The bill doesn’t affect mining projects powered by renewable energy sources or those that employ a less energy-intensive method of transaction verification than proof of work, which most cryptocurrencies use.

The process of Bitcoin mining takes up a large quantity of electricity to conduct the sophisticated ‘proof-of-work’ calculations required to create new bitcoin units.

Bitcoin mining, according to some assessments, requires almost 120 TWh of electricity each year, which is almost the same amount of electricity consumed by Argentina’s whole population.

The crypto industry came with the hope of new jobs, and that divided Senate Democrats. They wondered if the bill would bring about worse environmental or economic repercussions.

The bill will be presented to Governor Kathy Hochul for her signature or veto before it can pass into law. 

According to The New York Times, Hochul was sent donations from cryptocurrency companies. Including $40,000 from the CEO of a company that owns a former aluminum mill that was converted into a crypto mining operation.

This new law also calls for an assessment of the environmental effects caused by mining facilities.

The bill states, “Some cryptocurrency mining companies purchased retired fossil fuel plants and began operating at a much higher rate than the plants did previously.”

“We must determine whether the growth of proof-of-work authentication cryptocurrency mining companies that operate their own electric generating facilities and produce energy by burning fossil fuels is incompatible with our greenhouse gas emission targets established in law.”

In 2019, the state of New York set a climate goal to reduce emissions of greenhouse gas by 85% by 2050. The increased energy consumption caused by Bitcoin mining jeopardizes that goal.

Several mining enterprises moved to the United States after China imposed additional Bitcoin mining restrictions last year.

It is indicated in the latest numbers from the Cambridge Centre for Alternative Finance (CCAF) that the United States accounts for 37.84 percent of all bitcoin mining, and the country’s dominance is growing.

Not long after the move, New York became the new Bitcoin mining hotspot, thanks to the state’s ample hydroelectricity and abandoned fossil fuel plants which can be reopened to mine Bitcoin.

Both locals and environmentalists have reacted negatively to the revival of fossil fuels

Their concern is that the reopened fossil fuel plants may harm ecosystems. And that the Bitcoin mining operations will sabotage attempts to combat climate change.

Photo by Brian Wangenheim on Unsplash