- Governor Kathy Hochul could change the fate of bitcoin mining in New York by vetoing the bill
- The bitcoin mining community anticipates a domino effect that could span the entire country if this bill passes
- The bill comes in the wake of the Climate Leadership and Community Protection Act requiring New York’s greenhouse gas emissions to be cut by 85% by 2050
Last week, New York’s lawmakers passed a bill that bans specific bitcoin mining operations running on carbon-based power sources. The bill, which originally passed the State Assembly in late April before heading to the State Senate, calls for a two-year moratorium on certain mining operations using proof-of-work authentication methods to validate blockchain transactions. Proof-of-work mining requires specialized gear and massive amounts of electricity to mine bitcoin. Ethereum has publicly announced efforts to switch to a less energy-intensive process but will need to continue using the same method for at least a few more months.
Those lawmakers backing the legislation want to curb New York’s carbon footprint by cracking down on the miners using electricity from power plants burning fossil fuels. For two years, unless a proof-of-work mining company uses 100% renewable energy, it would not be allowed to expand or renew permits, nor would any new company be able to come online.
The legislation is now in the hands of Governor Kathy Hochul, who can sign it or veto it. If Governor Hochul signs the bill into law, New York will be the first state in the United States to ban specific operations pertaining to blockchain technology infrastructure, which industry insiders believe could have a domino effect across the United States, which accounts for 38% of the global bitcoin mining industry (https://ibn.fm/mzl1Z).
According to Perianne Boring, founder and president of the Digital Chamber of Commerce, “This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State.”
If the bill passes, Bitcoin mining companies like Riot Blockchain Inc. (NASDAQ: RIOT) could face halts in operations in one or more of their operational locations. Despite the company’s headquarters being located in Castle Rock, Colorado, operations are spread around the country – including Texas and New York. The bill could hinder the company’s operations in New York or more if additional states jump on the bandwagon.
“There are many labor unions who are against this bill because it could have dire economic consequences. Bitcoin mining operations are providing high-paying and high-grade, great jobs for local communities. One of our members, their average pay is $80,000 a year,” Boring stated.
Included in the New York bill is conducting a statewide study of the environmental impact of proof-of-work mining on New York’s ability to reach aggressive climate goals, which were set under the Climate Leadership and Community Protection Act. The Climate Leadership and Community Protection Act requires New York’s greenhouse gas emissions to be cut by 85% by 2050.
“Proof-of-work mining has the potential to lead the global transition to more sustainable energy. The bitcoin mining industry is actually leading in terms of compliance with that Act,” Boring further explained.
Nationwide, the White House Office of Science and Technology Policy examines the connection between distributed ledger technology and energy transitions. The Biden Administration is formulating its own policy to target bitcoin mining, aiming to mitigate energy consumption and resulting emissions. Those goals can be found outlined in the President’s executive order issued in March.
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