The rise of Bitcoin mining in New York State was an obstacle when the State Senate passed a bill that will stop new permits for certain fossil fuel power plants for mining. Bitcoin. The measure, which also initiates a study on the environmental impact of mining facilities in the state, was approved by the State Assembly earlier this year.
Promising new jobs, the crypto industry had divided Senate Democrats over whether the moratorium would lead to higher environmental or economic costs. The talks lasted until late in the evening when the state Senate was approaching its legislative deadline.
The bill will face another test when it comes to Gov. Kathy Hochul to sign or veto. Hochul received a $ 40,000 donation last month from a CEO of a company that manages a former aluminum plant that has been converted into a cryptocurrency facility, The New York Times recently reported.
This resurgence of fossil fuels has provoked a negative reaction
After China introduced new restrictions on bitcoin mining last year, many mining operations have been set up in the US. New York, with abundant hydroelectricity and removed fossil fuel plants that can be restarted to extract Bitcoin, quickly became a new hub for Bitcoin mining.
This resurgence of fossil fuels has provoked a backlash from some residents and environmentalists. They are concerned that the revived fossil fuel plants, with the help of Bitcoin, will damage ecosystems and derail the state’s efforts to deal with climate change.
The bill advanced today establishes a two-year moratorium on any new permits for cryptocurrency mining operations that use a particularly energy-intensive approach to verifying blockchain transactions. The approach, called proof of work, underpins the two largest cryptocurrencies: Bitcoin and Ethereum.
With the work test, the “miners” use special hardware to solve complex puzzles and in return gain cryptographic tokens. The process consumes a lot of energy. If the Bitcoin network were its own nation, it would rank 32nd in the world (between Argentina and the Netherlands) in annual electricity consumption.
This energy demand is a threat to the climate targets set by New York State in 2019, which pledged the state to an 85 percent reduction in greenhouse gas emissions by 2050.
The Greenidge Generation Station in the Finger Lakes region of New York City has become a particular point of interest for residents concerned about the impact of cryptocurrency mining on the environment. Started as a coal-fired power plant, Greenidge was renovated to run on gas and became a near-full-time Bitcoin mining operation in 2020.
The Bitcoin mining moratorium does not apply to Greenidge, as it focuses on fossil fuel power plants submitting new applications for permits to use energy to extract evidence-based cryptocurrencies instead of sending it. grid energy. Nor does the bill stop operations that run on renewable energy or use a less energy-intensive alternative to the proof of work that many other cryptocurrencies use to verify transactions.