(TNS) – Cryptocurrency mining operations are ongoing or in progress at Niagara Falls and North Tonawanda sites. The largest cryptographic mining company in North America, Foundry, is located in Rochester.
Attracted to the north of New York State by its abundance of cheap energy, the cryptocurrency industry promises to bring well-paid jobs to cities and towns that need a lot of economic growth, but it is a business full of risks to the environment.
Bitcoins are not physical currencies. Cryptocurrency “mining” does not mean looking for something on the ground. Blockchain Technology, NFT, Web 3.0 – These terms seem to be part of a foreign language.
Arcane terminology and confusing aspects of the digital currency industry have allowed it to overtake government regulators and establish a foothold in western New York and elsewhere in the north of the state. However, more lawmakers are catching up in response to concerns about potential environmental threats posed by start-ups. At the very least, New York State needs a cost-effective analysis for digital currency entrepreneurs to grow their businesses here.
Last month, a bill in the State Assembly advanced to the Roads and Media Commission that would put a two-year moratorium on cryptocurrency mining “working test”. That is an energy-intensive process by which computers compete with each other to solve mathematical puzzles to process and validate blockchain transactions. The bill would also require the state Department of Environmental Conservation to complete within a year an environmental impact statement on cryptographic operations across the state.
The two-year moratorium may be a step too far, which could slow the growth of an industry that could benefit the northern state’s economy.
An alternative bill, which is co-sponsored by Assembly Majority Leader Crystal Peoples-Stokes of Buffalo, would require the creation of a working group to study the impact of cryptocurrency in New York and assess whether the industry is compatible with climate goals. state.
Whether it’s a working group set up by the Legislature or a DEC study, New York must understand the commitments involved in having a growing presence in the cryptographic industry.
Environmental groups such as the Sierra Club want Bitcoin mining banned in the state, citing damage to the environment. Bitcoin, the most popular of all cryptocurrencies, uses as much energy in a year as Norway and Sweden.
Representatives of the cryptographic industry say that these claims are exaggerated and that cryptographic miners are increasingly using renewable energy resources, a process that will accelerate as renewables go down in price.
Foundry CEO Mike Colyer recently met with the editorial board of The Buffalo News. Colyer said 20% of all Bitcoin mining is done through Foundry’s pool software. Participants in his pool, he said, get 73% of their energy through renewable energy.
“It’s because in Bitcoin mining, the algorithm leads miners to lower-cost energy and lower-cost energy is renewable energy,” Colyer said.
Still, even though miners choose renewable energy, the large amounts of electricity they consume can take away from the supply of renewable energy available to households and other businesses.
New York State has set ambitious goals in the 2019 Climate Leadership and Community Protection Act, which calls for abrupt reductions in greenhouse gas emissions in the coming years. By 2040, the state will generate 100% of its electricity from clean energy sources. Once a state working group is established, the cryptocurrency industry must demonstrate that its energy-hungry computers can coexist with New York’s climate goals.
The zero point in the battle between the cryptographic mining industry and environmentalists in New York State is in the small village of Dresden on the Finger Lakes. That’s where Greenidge Generation, a cryptocurrency data center and power generation company, bought a removed coal plant, turned it into a 106-megawatt natural gas plant, and used it to boost its cryptocurrency mining business. Burning natural gas puts carbon in the air.
Greenidge has asked the DEC to renew its air emissions permit. The agency has advanced a decision as it studies information provided by Greenidge Generation on its greenhouse gas mitigation strategies. The decision is likely to shape decisions about how the state treats other cryptographic mining operators.
There is a lot of enthusiasm in the state for digital currency and its economic potential. New York Mayor Eric Adams said he wants the city to become “the center of the cryptocurrency industry.” Niagara Falls has several crypto mining companies taking root.
The northern part of the state needs new sources of prosperity when it can be achieved without throwing New York’s climate targets into an incinerator.
A CRYPTO GLOSSARY
Bitcoin: The first and most valuable cryptocurrency, launched in 2009 as a “peer-to-peer electronic cash system.”
Blockchain: A digital book in which each transaction is verified by a computer network and added as a “blockchain” to the chain. It is the technology behind cryptocurrencies.
Decentralized Finance (DeFi): Financial activities performed without the involvement of an intermediary, such as a bank or government.
Ethereum: the second largest cryptocurrency by trading volume.
Non-fungible tokens (NFTs): units of value used to represent the ownership of unique digital items such as art or collectibles.
Job Test: Allows a party to use computers to solve a cryptographic puzzle to validate a transaction in mining.
©2022 The Buffalo News. Distributed by Tribune Content Agency, LLC.
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