The governor of New York has approved a law banning Bitcoin mining not exclusively powered by sustainable sources. The legislation is part of the state’s efforts to achieve its ambitious climate goals, although its harsh conditions could prove counterproductive for the development of hybrid solutions.
New York Governor Kathy Hochul has signed into law a bill that bans Bitcoin mining throughout the state of New York using unsustainable energy sources. After passing in the New York state senate in June and the state assembly in late April, the legislation was pending the governor’s approval.
The approved bill targets businesses that mine Bitcoin and other cryptocurrencies in upstate New York using inexpensive energy. To enhance quality of life, the state intends to cut its carbon emissions by 80%. Proof-of-work mining that does not run its operations for two years solely on renewable energy sources is prohibited by law. Existing participants won’t be able to renew their licenses, and no new entrants will be permitted.
A Proof-of-Work (PoW) mining operation won’t be able to renew its licenses for the following two years unless it switches to renewable energy sources. Newcomers are not permitted at all to join the team. After crypto mining farms left China in search of a more hospitable business environment, New York became the preferred location for crypto mining operations.
Achieving Environmental Goals a Priority
The restriction is part of New York’s commitment to fulfill sustainability objectives set forth in legislation adopted in 2019. The state is required under the Climate Leadership and Community Protection Act to reduce its greenhouse gas emissions by 85% by the year 2050. The bill calls for a statewide investigation of the effects of proof-of-work mining activities on the environment.
Although the law intends to help in accomplishing these lofty objectives, its exclusion of hybrid solutions may ultimately be detrimental. Approximately 60% of the energy used for Bitcoin mining is renewable on a global scale; in New York, this percentage is closer to 80%.
Advocates for sustainable mining are concerned that the prohibition on mining would drive away businesses that already rely mostly on renewable energy. One mining executive warned that many renewable-based miners would also stay away “due to the possibility of more regulatory creep.”
The bill, which is being hailed as the first of its kind in the United States, has finally heeded the concerns of environmental activists regarding the impact of crypto mining activities on the environment.
