A hub of crypto mining, the New York State has cleared a bill to restrict crypto mining that uses POW mechanism used by blockchains like bitcoin. It is the first state to pass the law to ban some forms of crypto mining which has been under fire for its impact on the environment. A blockchain like bitcoin uses computing power and electricity that would rank among the power consumption of entire countries like Pakistan or Kazakhstan.
The new law has been set into motion by the New York Governor, whose office recently saw rallies by environmental activists in Manhattan. The activists wanted a two-year ban on certain forms of cryptocurrency mining in the state. The governor cleared the bill affirming that the state will continue to be a center for financial innovation while protecting the environment.
The new law does not ban cryptocurrency mining, but imposes certain restrictions:
- Individual crypto miners aren’t covered
- Crypto mining facilities born out of old fossil fuel plants will not have their licenses renewed, and new licenses will not be issued
- The focus will be on those crypto mining facilities that consume large amounts of electricity using proof of work consensus mechanism
- Crypto miners using renewable energy sources will be exempt
Cryptocurrency mining has been in the crosshairs of debates surrounding its impact on the environment. Elon Musk, whose tweets contributed to the rise of bitcoin prices in 2021 later drew attention to its huge energy consumption. China’s total ban on crypto mining led to migration of mining operations in other regions. Proponents of crypto mining point out that a large portion of such facilities today utilized renewable energy resources.
Sources:
https://www.investopedia.com/crypto-mining-ban-5409564
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