Proof-of-work (PoW) mining has faced a major hurdle as New York lawmakers passed a bill that bans some mining operations that rely on carbon-based power sources.
what’s at stake?
The bill calls for a two-year moratorium on certain cryptocurrency mining operations that use PoW (proof of work) authentication. If it is passed, PoW-based mining companies will not be allowed to expand their business for two years unless they switch to 100% renewable energy. These entities will also not be able to renew the permit for the same period. On the other hand, new market entrants will not be allowed to establish their base.
The bill was first passed by the state assembly in April. A month later, it received 36–27 approval from members of the New York State Senate. According to those who support it, the main idea is to reduce New York’s carbon footprint by cracking down on mining firms that use electricity from power plants that burn fossil fuels. The bill is now going on the table of New York Governor Cathy Hochul, who can sign or veto it.
Opposition
It all started after China imposed new restrictions on bitcoin mining last year. Subsequently, several mining operators set up shops around the world, seeking friendlier jurisdictions. With abundant hydropower and retired fossil fuel plants that could be revived to mine bitcoin, New York quickly cemented its position as a new hub for PoW mining.
It was this resurgence that sparked a significant backlash from residents as well as environmental advocates concerned about the network’s energy consumption.
Bill has been vigorously passed Oppose by cryptocurrency players. Many believe that if this becomes a law, New York will lose out on bitcoin mining opportunities for economic growth and the proliferation of renewable energy. While others argue that the bill will set a precedent for states across the country, creating a domino effect. Some, such as lead investor Kevin O’Leary, even went so far as to call the state non-investable.
Currently, the US hosts 38% of all bitcoin miners in the world. Therefore, a sudden transition to 100% green energy can be challenging.
Interestingly, just as New York passed a two-year moratorium on new bitcoin mining facilities – as elsewhere in Kenya, KenGen announced plans that it would like to provide its surplus geothermal energy to bitcoin miners.
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