New York Passes A Bill To Control Bitcoin Mining

Bitcoin and Ethereum (the two largest cryptocurrencies) are currently in that category, though the latter is transitioning to a different setup.

New York Passes A Bill To Control Bitcoin Mining - Ravzgadget
New York Passes A Bill To Control Bitcoin Mining.

New York lawmakers have passed legislation that would temporarily prohibit the establishment of new bitcoin mining operations. State senators approved the legislation 36-27 early Friday.

It is now on its way to Governor Kathy Hochul’s desk, where she will either sign it into law or veto it. The law would take effect as soon as it was signed.

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Last year, an attempt to pass similar legislation failed when the New York State Senate passed it but Assembly members did not. The most recent bill was passed by the Assembly in April.

The bill proposes a two-year moratorium on licenses for cryptocurrency mining operations that use power-intensive proof-of-work authentication methods to validate blockchain transactions.

Bitcoin and Ethereum (the two largest cryptocurrencies) are currently in that category, though the latter is transitioning to a different setup.

The moratorium only applies to mining operations that use carbon-based energy sources. Any that uses entirely renewable energy sources or a less powerful alternative to proof of work will be unaffected. Existing operations and those currently undergoing permit renewal will be unaffected.

During the moratorium, New York will conduct a study into the environmental impact of proof-of-work authentication methods, according to the bill. According to CNBC, New York’s Climate Leadership and Community Protection Act requires the state’s greenhouse gas emissions to be reduced by 85 percent by 2050.

Because of its abundant hydroelectricity, low electricity prices, and cooler climate than other areas of the United States, New York has become a hotbed for crypto mining operations (which means less energy is needed to cool mining hardware).

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Due to regulatory uncertainty, some mining companies have threatened to leave New York and establish themselves in more crypto-friendly states. Nonetheless, proponents of cryptocurrency have suggested that, given New York’s position as a legislative leader, other states may follow suit with similar regulations.

Meanwhile, the Biden administration is developing a policy on bitcoin mining. The White House is investigating the potential impact of such technology on greenhouse gas emissions.

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