Legislators in New York passed a bill to ban new mining operations. The governor can either sign it into law or veto it.
The Chamber of Digital Commerce says that if Hochul signs the bill, New York will be the first state in the country to ban the use of technology. It could have a domino effect across the U.S., which is currently at the forefront of the globalbitcoin mining industry, accounting for 42% of the world's miners.
The New York bill, which passed the State Assembly in late April, calls for a two-year moratorium on certain cryptocurrencies mining operations which use proof-of-work verification methods. Proof-of-work mining requires sophisticated equipment and a lot of electricity. The method will be used for at least a few months.
Leadership in the state capitol pushed for an eleventh-hour vote as they were able to flip some of the undecided senators.
The legislation is intended to curb the state's carbon footprint by cracking down on mines that use electricity from power plants. If it passes, proof-of-work mining companies won't be allowed to expand or renew permits if they don't use 100% renewable energy for the next two years.
The net effect of this would be to weaken New York's economy by forcing businesses to leave.
This is a huge blow to the state's future as a leader in technology and financial services. The decision will eliminate critical union jobs and further diminish financial access to the many underbanked populations living in the Empire State.
New York is setting a bad precedent that other states could follow.
The law would take effect as soon as the governor signs off.
The Climate Leadership and Community Protection Act requires New York to cut its greenhouse gas emissions by 85% by the year 2050.
The recent swell of support for this year's proposed ban has a lot to do with the mandate to transition to sustainable energy, according to Boring.
Boring said that proof-of-work mining could lead the global transition to more sustainable energy. Compliance with the Act is being led by the mining industry.
According to the Chamber of Digital Commerce, the sustainable electricity mix for its members mining in the state of New York is close to 80%.
John Warren said that the regulatory environment in New York will not only halt their target of carbon-based fuel proof of work mining, but will also discourage new, renewable-based miners from doing business with the state.
According to the latest data from the US Energy Information Administration, a third of New York's generation comes from renewable sources.
The state has a chilly climate, which means less energy is needed to cool down the banks of computers used in digital currency mining, as well as a lot of abandoned industrial infrastructure that's ripe for reuse.
Andrew Yang, a former presidential candidate and New Yorker, told CNBC that he believes mining operations can help develop demand for a renewable source of energy.
A lot of this stuff is going to push activity to other places that might not achieve the policymakers' goal.
The industry isn't waiting for the state to make a ban official before acting.
In a matter of months, New York's share of the mining network dropped from 20% to 10%, as miners migrated to other areas of the country.
Kevin said that customers were scared off from investing in New York.
Less than 5% of the $500 million invested in mining equipment by Foundry has gone to New York.
There could be a number of follow-on effects if the governor signs the ban into law.
According to industry advocates, each of these facilities has a significant economic impact with many local vendors consisting of electricians, engineers, and construction workers. Tax dollars moving out of state could be a result of an exodus of cryptographers.
A lot of labor unions are against the bill because of the economic consequences. Local communities are benefiting from the high-paying and high-grade jobs that are being created byBitcoin mining operations. The member with the highest average pay is $80,000 a year.
New York is a leader when it comes to state legislation, so there is a chance for a similar phenomenon to happen across the country.
The lead of New York state would make it easy for other blue states to copy.
The implications for where the technology will scale and develop in the future are massive.
Many in the industry think that the New York mining ban is overblown.
The industry knows New York is hostile to the mining business, says a veteran miner.
Feinstein said there was no reason to go into a region that wasn't for you. If you ignore that, then you have to deal with the consequences of conducting business in a region that doesn't want your business
Georgia, North Carolina, North Dakota, Texas and Wyoming are some of the friendlier states.
Texas has a deregulated power grid with real-time spot pricing and access to excess renewable energy as well as stranded or flared natural gas.
He said that it's an attractive environment for miners to deploy large amounts of capital. There are a lot of power purchase agreements that are in various stages of negotiation.
The Biden Administration is working on a policy to address energy consumption and emissions.
The White House Office of Science and Technology Policy is looking at the connections between distributed ledger technology and energy transitions, the potential for these technologies to impede or advance efforts to tackle climate change, and the impacts these technologies have on the environment.
One of the deliverables was spelled out in the president's executive order.
The White House is examining the role these technologies might play in accounting for greenhouse gas emissions, as well as possibly supporting the build out of a clean electricity grid, according to CNBC.
They are looking at how cryptocurrencies can affect grid management and reliability.
It is not clear if these recommendations will lead to federal law on proof of work mining. States are in charge.
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