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New York Imposes Two-Year Moratorium on New Crypto Mining Facilities

Crypto Farm
(Image credit: Crypto Farm)

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.

Francisco Pires is a freelance news writer for Tom's Hardware with a soft side for quantum computing.

  • InvalidError
    While hydro was historically considered renewable, many of the USA's largest water reservoirs entered summer close to their lowest lows in recorded history despite May usually being their highest level of the year, meaning water consumption over the winter exceeded replacement from rain and snow. Many people won't be able to rely on cheap hydro power for much longer, especially if crypto ends up taking all of it.

    If New York knows what is good for itself as a whole and the world in general, I hope that moratorium turns into a ban within the next two years.
    Reply
  • King_V
    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.
    Go, then. You won't be missed.
    Reply
  • Senile Otaku
    King_V said:
    Go, then. You won't be missed.

    It's attitudes like yours that has turned NY State to cr*p. You probably live in NYC; well those of us further "upstate" would like to kick NYC out of the state.

    And is this really about "energy consumption", or is that just a convenient excuse to shut down a system the government doesn't have control over?
    Reply
  • digitalgriffin
    Admin said:
    The State of New York has issued a moratorium on new cryptocurrency mining facilities looking to settle their roots within its borders. The move blocks energy-intensive Proof of Work expansions while instating renewable energy requirements.

    New York Imposes Two-Year Moratorium on New Crypto Mining Facilities : Read more

    Even if crypto was 100% renewable energy, that's 100% energy that could be used elsewhere where carbon based fuels are used.

    That's like daming up a stream to feed a lake? What happens to the downside of the dam? It suffers.
    Reply
  • spongiemaster
    digitalgriffin said:
    Even if crypto was 100% renewable energy, that's 100% energy that could be used elsewhere where carbon based fuels are used.
    Not if the farm paid for the construction of the facility or revival of an abandoned facility.
    Reply
  • InvalidError
    spongiemaster said:
    Not if the farm paid for the construction of the facility or revival of an abandoned facility.
    Most of the retired facilities are oil, coal and gas powered, not particularly cost-effective. Also, production of solar panels, wind turbines and supporting components is finite, every panel or turbine that goes to crypto is still one less panel or turbine going into the grid.
    Reply
  • SSGBryan
    Senile Otaku said:
    It's attitudes like yours that has turned NY State to cr*p. You probably live in NYC; well those of us further "upstate" would like to kick NYC out of the state.

    And is this really about "energy consumption", or is that just a convenient excuse to shut down a system the government doesn't have control over?

    Without NYC, how would the rest of the state pay for well, anything? Buffalo isn't picking that up.

    I hope those miners do move to Texas - I lived in TX for 15 years. Miners in Texas will go broke very, very quickly. I hope they like paying spot prices for the electricity.

    The Texas electric grid is LITERALLY designed to gouge their customers.
    Reply
  • vern72
    This is just the beginning. This is going to happen more and more as more people turn to electric vehicles.
    Reply
  • King_V
    Senile Otaku said:
    It's attitudes like yours that has turned NY State to cr*p. You probably live in NYC; well those of us further "upstate" would like to kick NYC out of the state.

    And is this really about "energy consumption", or is that just a convenient excuse to shut down a system the government doesn't have control over?

    The point - you have completely missed it. And, looks like I found the crypto-fan.

    EDIT: also worth noting, I do not live in NYC.
    Reply
  • Senile Otaku
    King_V said:
    The point - you have completely missed it. And, looks like I found the crypto-fan.

    WRONG! I have NO interest in doing crypto-mining. Any advance hardware I'm getting is for animation rendering. But I have little trust that the NY State government does anything to benefit the majority of it's citizens. Kind of like the Bonehead Beijing Biden administration.

    I think I've likely seen the point they DON'T want you to see.
    Reply