On Tuesday night, the New York State Assembly approved a two-year moratorium on Bitcoin mining, pending the measurement of environmental impact.
The news came out on Twitter:
The bill will now go to the state Senate, which is controlled by Democrats. If it becomes law, it will almost certainly be the most comprehensive legislation of its kind in the world. Here is an extensive background piece that James Ledbetter’s FIN published on March 27:
The green war on Bitcoin mining is gaining ground
FIN has repeatedly written (as recently as last week) about proposals around the world to halt or shut down cryptocurrency mining for environmental reasons. The sheer amount of electricity needed to extract Bitcoin and other “working proof” -based cryptocurrencies is at odds with the stated goals of many nations and jurisdictions to reduce their carbon footprint. However, apart from the extremely local level, very little has been achieved on this front (outside China, and even there the environmental reason is speculative); Earlier this month, a European Parliament committee refused to issue a mining moratorium that was being voted on as part of a broader digital assets framework.
A possible regulatory breakthrough came this week: the New York State Assembly’s environmental conservation committee passed a version of a bill that passed away last year; the bill would impose a two-year moratorium on working-proof cryptocurrency mining, particularly Bitcoin, which is almost certainly the most widely mined cryptocurrency in New York State. There is a comparable bill in the state Senate, and if both are passed, it doesn’t seem crazy that Gov. Kathy Hochul, who was appointed when Andrew Cuomo resigned last year, is facing “re-election” for the first time this year. can sign. in law. In January Politician history, the Hochul office said it was “actively reviewing proposals regarding the role of cryptocurrency mining in New York’s energy landscape,” but failed to pass any particular bill.
If this policy becomes law, it could be a big problem even for non-New Yorkers. True, the bill would not shut down all of New York’s cryptographic mining test work overnight; rather, it would prohibit the renewal of existing permits and the approval of new permits. In addition, the bill only refers to permits for “a power generation facility that uses a carbon-based fuel”; presumably at least some New York cryptographic mining uses purely renewable energy and would be exempt.
However, the New York portion of the Bitcoin mining pie is very large. According to figures released last year by cryptographic mining pool Foundry USA, 19.9% of the US Bitcoin hashrate. UU. (the collective computing power of miners) is located in New York, making it the largest Bitcoin mining state, without Kentucky, Georgia and Texas. far back.
Unsurprisingly for those who follow this topic, the listed company Greenidge Generation is at the center of the New York debate on cryptographic mining. Greenidge operates a 107-megawatt natural gas plant in the Finger Lake region that feeds its Bitcoin mining. The company argues that it creates well-paid jobs in the north of the state and generates energy for the local grid; It has the support of the local union of electric workers, but has caused the fire of many environmental groups, including Seneca Lake Guardian and Sierra Club. In December, Sen. Elizabeth Warren sent a scorching letter to Greenidge, expressing concern about the impact of Bitcoin mining on the environment and the costs of electricity. (FIN emailed Greenridge for an interview but received no response.)
New York State has been constantly building the arsenal it can potentially use to stop or curb companies like Greenidge. In fact, a white paper published this week by Columbia University’s Sabin Center for Climate Change Law concluded that Governor Hochul and the state Department of Environmental Conservation (DEC) already have the legal authority to stop any new permits for cryptographic mining facilities. . In 2020, the state’s Climate Leadership and Community Protection Act came into force, which requires statewide greenhouse gas emissions to be reduced by 85% by 2050.
At least some of Greenidge’s crucial state permits were granted in 2016, so they face renewal in 2021. However, they make no mention of Bitcoin mining, and since the climate law went into effect, it’s not clear that Greenidge is fulfilling. In fact, last May the state DEC wrote to Greenidge declaring its renewal application “incomplete” and asking for more information on greenhouse gas emissions for September. The DEC is still reviewing Greenidge’s renewal application.
As FIN noted in December, Greenidge, for all the attention he gets, is of fairly modest size. Throughout 2021, Greenidge extracted 1866 Bitcoin and earned $ 88 million in revenue from cryptographic mining. The company lost money during the year, mainly due to a deterioration in goodwill in another part of its business, the newly acquired Support.com. Greenidge’s crypto mining business seems to be profitable, but not for crazy, even though Bitcoin prices skyrocketed in late 2021.
Coincidentally, Coindesk released a revealing autopsy this week on the city of Plattsburgh, New York, which in 2018 became the first U.S. municipality. These problems will appear worldwide as Bitcoin mining expands. This week, The Block reported that Bitfinex / Tether, which produces the world’s largest stable currency, is entering the Bitcoin mining business, focusing on Latin America and Europe. ExxonMobil has a pilot program in North Dakota that uses excess gas that would otherwise be burned from oil wells to extract cryptocurrency. According to a report, the oil giant is considering extending this program to Alaska, Nigeria, Argentina, Guyana and Germany. Many of these places will look at what New York State is doing as they try to balance the supposed economic benefits of cryptographic mining with the need to reduce greenhouse gas emissions.