New York bans crypto mining except on one condition

Zilber

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The state of New York has just passed legislation against Bitcoin mining companies. From now on, infrastructures that rely on fossil fuels are prohibited. To continue their operations, cryptocurrency miners absolutely must turn to renewable energy sources.



On Tuesday, November 22, 2022, Kathy Hochul, Governor of New York State, signed into law a law prohibiting a large part of cryptocurrency mining farms. The text, which was passed by the state parliament a few months earlier, bans infrastructure for a period of two years. It is the first-ever US state to legislate against mining Bitcoin and other crypto assets.

100% renewable energy


The law does not outright prohibit mining on New York soil. The law only targets infrastructure that relies on fossil fuels, such as coal. Obviously only farms use it exclusively renewable energy may continue their activities.

So miners who exploit the energy of a hydroelectric power plant or a wind farm have nothing to worry about. These facilities can expand further and obtain permits. Same story for new players looking to enter the industry. If the indicated energy mix contains fossil fuels, it is no longer possible to obtain a permit from the State. To continue mining Bitcoin, industry players must draw a line below coal, oil, and gas.

Also read: In the middle of the energy crisis, Europe says ready to ban Bitcoin mining
A new exodus for Bitcoin miners


The New York legislation threatens to upset the US mining industry, which has become essential to securing the Bitcoin blockchain. Indeed, last year many Bitcoin miners migrated to the United States after the ban issued by China. Within months, a plethora of farms sprang up on American soil. The United States soon became theth number of mining in the world by collecting more than 30% of the hashrate, i.e. the power of the Bitcoin network, the University of Cambridge assures.

bitcoin mining USA

University of Cambridge

Some miners settled in New York State. The state has several assets for mining experts, such as a cold climate and numerous hydropower resources. In the second half of last year, several mining companies revived old power plants to mine Bitcoin in New York. Bitcoin mining companies in New York are currently good for more than 9% of the hashrate generated in the United States. It is the 4th US state to produce the most bitcoins, behind Georgia, Texas and Kentucky.

bitcoin state new york

University of Cambridge

Asked by our colleagues at CNBC, several industry players expect the decision to be made in New York ” a domino effect in the United States”. Encouraged by public opinion, other states could take similar measures. Thereafter, another exodus of miners could take place in the coming years. Industry may need to reorganize in areas where legislation is more lenient. New York miners have already started their migration. Data from mining company Foundry shows that the hashrate generated in New York has halved in recent months. When the law was passed by parliament, the miners began making arrangements to relocate their facilities.

“Our clients are afraid to invest in New York State”says Kevin Zhang, Vice President of Foundry.
Reviews from miners


For its part, the Chamber of Digital Commerce, a private group dedicated to defending cryptocurrencies, points out the inconsistencies of the law. According to his findings 80% of New York industry already uses green and renewable energy. The lobby group then argues that it is not necessary to enact legislation to regulate the activities of minors. Several leaders of the mining industry are fully in the same direction and even believe that the law will have a negative impact.

“The regulatory environment in New York threatens not only to hinder their goal […] but will likely discourage new renewable energy miners from doing business with the state due to the possibility of greater regulatory restrictions”says millionaire John Warren, CEO of mining company GEM Mining.
In most cases, farms depend on an energy mix, who favors green energy, but also fossil fuels. By enacting legislation, New York could force American miners to do so acceleration of the transition to renewable energy, already well advanced on a global scale. According to data from the Bitcoin Mining Council (BMC), a group of miners, nearly 60% of BTC mining worldwide currently relies on green energy. The industry’s 44 largest companies systematically favor renewable energy sources over fossil fuels, which they know are doomed.

bitcoin consumption

Statistics

The industry is trying to do just that by switching to green energy reduce the environmental impact of bitcoin. Indeed, according to data from Statista, the queen of cryptocurrencies consumes more than 140 terawatt hours of electricity per year. That is more than in many countries, including Norway, Switzerland or Belgium.

Source :

CNBC
 
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