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Brown bitcoin mining limited in New York

By Daniela Ešnerová

08:00, 29 April 2022

Illustration of coin with BTC logo in a mine
The bill passed as a part of Earth package – Photo: ShutterStock

A month and a half after a failed attempt of the European Union to ban proof-of-work (PoW) cryptocurrencies, the state of New York moved to limit this energy-intensive way of mining cryptocurrencies on its territory.  

New York State’s Assembly passed a bill imposing a two-year moratorium on preventing issuing new permits as well as renewing existing permits issued to PoW crypto miners not using clean energy in the New York area. 

Bitcoin (BTC), ether (ETH) or dogecoin (DOGE) are all PoW cryptocurrencies, ETH is however in the process moving to proof-of-stake protocol.

Energy-intensity of PoW protocol has been a subject to keen scrutinity. Last month, Capital.com looked at whether cryptocurrency’s bad environmnetal creditentials are justified, and delved into data and comparing and contrasting power consumption of PoW cryptocurrencies and some parts of traditional finance. See the results here.

The Assembly Bill A7389C, sponsored by Anna Kelles (Democrat), was part of a Earth Package. It was passed with 95 voting in favour and 52 against. The bill will now move to New York Senate.

Kelles said the point of the two-year moratorium was preventing “the reactivation of currently mothballed power plants or peaker plants from converting to cryptomining entities. There are 49 such power plants in New York and many of them are in environmental justice communities.”

While proponents of the bill hailed the step as good news for the environment, some from the cryptocurrency industry labelled it as ‘misguided’.

“In what world does it make sense to let an industry waste so much energy -- certainly not in a burning world. Great work in passing the crypto moratorium bill through the Assembly,” Anna Kelles, Rich Schrader New York State Policy Director at Natural Resources Defense Council wrote.

DOGE/USD

0.12 Price
-2.990% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,422.45 Price
+0.020% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

BCH/USD

383.70 Price
+1.520% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

XRP/USD

0.58 Price
-8.930% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

But advocacy group Blockchain Association called the outcome ‘unfortunate’ in a tweet. The group hailed the cryptocurrency community's engagement in their efforts to prevent the bill from passing. “But we’re grateful to the champions who advocated for a rational, progressive, and innovative approach to crypto in NY,” the Blockchain Association wrote.  

“In a very short period of time we’ve made a lot of progress educating lawmakers about the negative impacts of this bill, and that was demonstrated tonight on the floor of the Assembly. It was a great battle that involved over three hours of debate and demonstrated there is greater opposition to the mining ban than proponents believed.”

The group warned that the bill passing could lead to cryptocurrency mining firms moving to “jurisdictions with less environmental protection, not more” and “New York missing out on hundreds of six-figure-paying jobs,” while “emissions will likely increase as a result”.

“Bitcoin mining offers Western and Upstate NY a strategic advantage in becoming a technological center of excellence for the next generation of the internet. NY cannot afford to miss out,” the group argued.

The group said it would shift its focus to NY Senate. 

European Union recently considered a ban on POW cryptocurrencies, but following community galvanising against the proposal, the members of European Parliament voted against.

Markets in this article

BTC/USD
Bitcoin / USD
63816.45 USD
-666.3 -1.030%
DOGE/USD
DogeCoin / USD
0.1200684 USD
-0.0036757 -2.990%
ETH/USD
Ethereum / USD
3422.45 USD
0.61 +0.020%

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