When people think of a ban on crypto mining, they usually think of China. New York seems poised to become a part of that conversation. Lawmakers in New York recently advanced a bill that would place a moratorium on issuing new permits for proof-of-work crypto mining that uses ‘carbon-based fuel’ for two years. The bill is not a blanket ban on crypto mining but could significantly hamper the activities of crypto miners in New York.
New York currently accounts for the highest Bitcoin mining rate in the US, with 19.9% of the country’s entire hash rate. The state’s reliable and cheap electricity and chilly weather make it an ideal location for crypto miners. The bill could potentially put brakes on New York’s crypto mining boom and send miners to friendlier states down south.
This is ironic for a state which elected a pro-Bitcoin mayor in 2021. Eric Adams promised to make NYC the ‘center of the cryptocurrency industry.’ The state’s lawmakers do not seem to share that dream.
“Center of the cryptocurrency industry”
Eric Adams, New York city’s then mayor-elect, declared in Nov 2021 in a tweet to make New York, ‘the center of the crypto industry’. He also vowed to receive his first three paychecks in Bitcoin. The comments were welcomed by members of the crypto community, at a time when members of his party in Congress were considering several crypto regulations.
New York already has a significant stake in the American crypto industry, accounting for almost 20% of Bitcoin’s hash rate. Coinmint, one of the largest crypto mining companies in the world, is domiciled in the state. This makes New York an important state for crypto miners so a crypto-friendly mayor is a match made in heaven.
However, the honeymoon did not last for long. Four months later, the mayor told a gathering of the state’s lawmakers that ‘I support cryptocurrency, not crypto mining’. The comments delighted environmental groups but was a stab in the back for crypto communities who supported the mayor’s election.
Banning Mining Doesn’t Help the Climate
New York passed the Climate Leadership and Community Protection Act in 2019. The act seeks to cut the state’s electricity emissions to zero by 2040. The act also targets 70% renewable energy by 2030. Proponents of the bill posit that crypto mining poses a threat to this goal. But crypto miners believe they are being singled out as a softer target compared to bigger polluters in transportation and logistics.
That said, many of the miners in New York use energy sources with low zero-emission rates. Greenidge Power in Dresden recently converted a coal-powered plant into a gas-powered plant, reducing emissions significantly. The company also sells power to the grid.
Coinmint, the state’s largest crypto mine, uses hydropower to run its operations. The bill in New York appears to be an appeasement to environmentalists by scapegoating crypto miners. A group who does not yet wield as much political power as other businesses.
Still Time to Act
The bill banning crypto mining still needs to pass the New York Senate and be signed by Governor Hochul before it can become law. New York residents can call, email and text their representatives, registering their displeasure with the bill. 2022 is an election year and all 63 members of the New York Senate are up for re-election in November. Governor Hochul is also up for re-election which makes it an ideal time to put political pressure on them. You can donate to primary opponents of representatives who support the bill or campaign against them.
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