Crypto Mining Ban Makes New York Potential Model For Other States

New York’s two-year ban on new proof-of-work cryptocurrency mining may have little direct impact on power-hungry industries. contraction Anyway – but Empire State’s impact elsewhere could be a long-term problem.

“I think the big problem here is that other states could use this moratorium to enact similar laws locally,” he said. blockchain This is done through a combination of elements of the two main systems in which information is added: Proof of Work and Proof of Stake.

Sed argues that New York has a lot of “influence” because laws adopted in Albany are sometimes replicated in other states. This can be seen in New York’s BitLicense, which allows companies to conduct cryptocurrency business activities in New York, which California lawmakers attempted to copy before being denied by Governor Gavin Newsom.

While no U.S. state has yet followed New York’s lead, the Canadian province of Manitoba last month set an 18-month moratorium on new crypto mining operations. signed Established on November 22nd

The Finger Lakes region has helped New York become one of the largest states. bitcoin mining bProcessing power accounted for about 10% of all US capacity at the end of last year, according to a University of Cambridge study.

Since the 1950s, the decline of Rust Belt manufacturing has left underutilized and abandoned power plants and factories in upstate New York, a convenient location for cryptocurrency miners.However proof of work Mining, which requires participants to solve mathematical formulas in a way that helps prevent anyone from abusing the system, seeks to reduce carbon emissions as developed countries combat climate change. It is therefore opposed by environmental groups.

“This first-of-its-kind law should set the standard for every other state where cryptocurrency miners are invading, exploiting resources, and wreaking havoc,” said nonprofit public interest environmental group EarthJustice. said Liz Moran, a policy advocate in New York City. – legal organization.

A two-year ban is not absolute. It does not affect existing businesses and does not apply to miners whose electricity is not derived from fossil fuels. However, new mining operations will be prohibited and the license will not be renewed.

“This bill would create a much-needed pause in the current trend of buying old New York power plants for corporate profit, and properly assess the impact this industry has on our climate goals before it’s too late. allow you to evaluate. A nutritionist and Democrat in the state legislature, whose constituencies span parts of Cortland County and all of Tompkins, including the college town of Ithaca.

Ceres sponsored a bill that would focus on the environmental impact of crypto mining.

In the South, New York City Mayor Eric Adams, also a Democrat, has pledged to make the state a cryptocurrency hub. Adams promised to meet with legislators and compromise on digital assets. Adams took his first three salary Bitcoin has made that point despite the market downturn.

Since Ethereum switched to proof-of-stake in September, if the mayor can’t strike a deal, proof-of-work miners (mainly bitcoin) seem to have no choice but to flee to a friendlier place. .

“Other states have taken a slightly different approach to bitcoin mining, encouraging it rather than trying to eliminate it,” said a service provider that designs, builds and manages vertically integrated bitcoins. said Andrew Webber, Founder and CEO of Digital Power Optimization. Mining operations on behalf of the energy sector. “Places like Ohio, Wyoming, and Kentucky, Texas are using sales tax exemptions and other incentives to attract more mining activity. It’s a useful, profitable, flexible load.”

riot blockchain
Riot
had already abandoned upstate New York for Texas, and in July moved operations from Massena across the St. Lawrence River from Canada to Rockdale, about 50 miles northeast of Austin.

These moves could potentially stifle financial innovation in New York, while benefiting conservative states like Georgia, Texas and Kentucky, the US leaders in bitcoin mining in 2021, according to a Cambridge report. There is likely to be.

“I don’t think two years of careful review should be seen as anything other than preparing countries, energy regulators and politicians for what’s next,” says Webber. “This is neither positive nor negative yet,” he adds.

On the one hand, Webber argues, the next two years could be an opportunity to allow states to proceed with mining cautiously while policymakers understand the costs and benefits of their activities. . On the other hand, he believes they will enact a permanent ban, which may be the wrong move.

“We agree that analyzing and addressing our carbon footprint is important, but it has to be done carefully,” says Webber. “That said, no one seems to care much about using electricity to light Yankee games or make ties. Why is this particular use of electricity so desirable?” Isn’t there?”