Fresh plans to restrict some crypto mining operations in the state may cast a shadow, albeit temporarily, on Eric Adam’s vision for New York as the Bitcoin capital of the world.
New York has recently become a Bitcoin mining hotspot thanks to its low energy costs. However, a three-year moratorium is being considered on permits for power companies that burn fossil fuels to mine cryptocurrency.
The push for a moratorium on crypto mining has come from environmentally conscious lawmakers. It targets gas plants that sell or provide energy to miners, and if passed it might pave way for other states or possibly congress to implement legislation similar to it.
Expert in the industry have warned that such a move might prevent the government from reaping the benefits of the new technology. Stakeholders believe that the moratorium would set the state back more than three years.
According to Kyle Schneps, director of public policy at Foundry, a three-year moratorium could result in an effect to the tune of three years. “A statewide moratorium that has vague language and captures companies that use mostly renewables is a mistake,” he says. New York accounts for 20% of Foundry’s mining in the US, according to the cryptocurrency mining firm.
The crypto mining significance of New York speaks for itself as the US now dominates in terms of hash rate percentage for Bitcoin mining. The state already leads the pack in crypto mining in the US at a time when many crypto businesses are setting up operations in the country to avail easy access to inexpensive land and top facilities.
While a moratorium in New York is noteworthy, it might have far-reaching effects. The US Congress is also sharpening its claws for an eventual showdown with cryptocurrency miners as it considers ways to effectively regulate mining activities.
The moratorium has the support of several environmental organisations, and the proponents are optimistic that it’ll pass.
Although the bill only applies to mining that uses fossil fuels, crypto miners that use renewable energy are concerned that they may be next. Their fears originate from the fact that they use fossil fuels for backup power, and hence the restriction might affect them as well.