The state of New York has doubled down on energy-guzzling cryptocurrency mining farms. Last month, a bill passed by the state Assembly that directly targets Proof-of-Work (PoW) blockchains such as Bitcoin and the yet-unMerged Ethereum. The measure imposes a two-year moratorium on new PoW mining farm installations powered by carbon-based fuel. However, it leaves projects based on renewable energy sources or less energy-intensive Proof of Stake (PoS) mining operations ticking along unencumbered.
Following China’s crackdown and an outright ban on cryptocurrency mining, many operators re-localized to Kazakhstan and the United States, sometimes placing undue strain on existing power infrastructures. Chief among the U.S. options for miners was the state of New York, due to its relatively cheap power sourced from hydroelectric facilities and a rising number of decommissioned or otherwise disabled carbon-based powerplants that cryptocurrency mining specialists could spin up with relative ease.
It’s estimated that renewable sources account for 50% of New York’s energy production. Interestingly, a recent analysis led by Microstrategy places around 60% of Bitcoin’s total power consumption as being derived from renewable sources.
The narrative surrounding cryptocurrencies’ weight on the world’s power grid and projected environmental impacts has led lawmakers to dial-in limitations on mining. Alongside the moratorium, the bill also enshrines a study on the environmental impact of mining facilities in New York, which aims to cut 85% of its greenhouse gas emissions by 2050.
The moratorium isn’t currently being enforced, as it still needs to be approved (or vetoed) by Governor Kathy Hochul. Hochul last month received a $40,000 donation from “a chief executive of a company that runs a former aluminum plant turned cryptomining facility”, according to The New York Times.
Lobbyists with The Bitcoin Association have spoken against the measure over fears of the “soft-ban” being eventually extended or turned into a full-fledged cryptocurrency mining ban in the state. It is threatening to leave and relocate to more mining-friendly states, such as Texas.