New York Governor Signs Bill To Limit Crypto Mining

Crypto mining is now effectively banned in New York, unless mining operations are powered by 100 percent renewable energy sources.

It comes after New York Govornor Kathy Hochul signed a law on Tuesday banning certain bitcoin mining operations that run on carbon-based power sources, CNBC reported.

This move is notable as authorities around the world seek to negate the environmental impact and heavy electricity usage associated with crypto mining operations.

Mining ban

Back in June New York lawmakers passed a bill to ban for two years, certain crypto mining operations that run on carbon-based power sources.

After that bill was passed, Governor Kathy Hochul had the power to either sign the bill into law or veto it.

By signing it into law on Tuesday, it makes New York the first US state to ban blockchain technology infrastructure, and it could potentially have a domino effect across America, which is said to account for 38 percent of the world’s crypto miners.

“It is the first of its kind in the country,” Hochul was quoted by CNBC as saying in a legal filing detailing her decision.

The governor added that it was a key step for New York, as the state looks to curb its carbon footprint, by cracking down on mines that use electricity from power plants that burn fossil fuels.

But not all were in favour of the ban.

“The approval will set a dangerous precedent in determining who may or may not use power in New York State,” the Chamber of Digital Commerce was quoted by CNBC as saying in a statement.

The net effect of this, according to Perianne Boring of the Chamber of Digital Commerce, will weaken New York’s economy by forcing businesses to take jobs elsewhere.

Crypto mining

Essentially, cryptocurrencies are created when high-powered computers compete against other machines to solve complex mathematical puzzles – a process known as mining.

Proof-of-work mining requires sophisticated equipment, and a great deal of electricity is used to create cryptocurrencies.

Some cryptocurrencies such as Ethereum are switching to a less energy-intensive process.

As it currently stands, a third of New York’s in-state generation comes from renewables, according to the latest available data from the US Energy Information Administration.

It should be noted that New York includes its nuclear power plants as part of its 100 percent carbon free electricity goal.

New York also produces more hydroelectric power than any other state east of the Rocky Mountains.

Historically New York is noted as a US state that is not friendly to crypto mining operations.

Other US states are said to be much friendlier to crypto mining jurisdictions, including Georgia, North Carolina, North Dakota, Texas and Wyoming.

Environmental cost

It is widely known that crypto mining typically comes with an environmental cost.

This energy-sapping activity often relies on electricity generated with fossil fuels, particularly coal.

Cambridge research has previously estimated that crypto mining consumes 0.45 percent of global electricity production.

Last year the Cambridge Bitcoin Electricity Consumption Index (CBECI), compiled by the university’s Cambridge Centre for Alternative Finance, found that the US, Kazakhstan and Russia were now the top three producers of the cryptocurrency.

That came after China in June 2021 began a crackdown on Bitcoin and other cryptocurrencies.

Beijing then declared all transactions in the currency to be illegal.

In 2019 China had accounted for 75 percent of the world’s Bitcoin mining energy consumption.

Other countries also banned crypto mining.

At the start of this year, Kosovo officially banned cryptocurrency mining, as the Balkan country battled rolling blackouts and an energy crisis, caused by soaring global energy prices and an electricity shortage after its largest coal-fired power plant was shut down over a technical issue.