New York Assembly Bill May Crack Down On Crypto Mining

The Greenidge Generation bitcoin mining facility is located on a former coal plant on Lake Seneca in Dresden, New York.

The Greenidge Generation bitcoin mining facility is located on a former coal plant on Lake Seneca in Dresden, New York.
Photo: Ted Shaffrey (Getty Images)

The New York Assembly wants to prevent cryptocurrency mining operations from being installed in the state’s closed power plants. Member of the assembly Anna Kelles has enacted legislation aimed at stopping cryptocurrency mining in the state and reducing greenhouse gas emissions from the energy-intensive industry.

Assembly Bill A7389C asks for an amendment of the state environmental conservation law to establish a moratorium on cryptocurrency mining operations operating using work test authentication methods, that is widely used in crypto. It would also require the New York Department of Environmental Conservation study environmental impacts of existing and proposed mining operations. The bill was passed by the State Conservation Environment Committee in March 2022 and is now pending full vote. state legislature.

If it happens, the bill ban cryptocurrency mining test-based operations in the state for a period of two years. Kelles says such moves are necessary to reduce pollution because when mining operations compete with each other to validate cryptographic transactions, they have to set up large facilities with high-power computers; the operation of these facilities requires a huge amount of energy, so many operations installed in old power plants. Cryptographic miners also try to take advantage of using newer, faster processors, which means they produce electronic waste whenever they upgrade their hardware.

Earther spoke with Assemblyman Kelles about the bill and other environmental initiatives in the state. This interview was edited and condensed for clarity.

Angely Mercado, Earther: Why is New York State such a useful place for cryptographic mining operations?

Assemblywoman Anna Kelle: [Mining companies] they are always looking for the cheapest source of electricity because they use it a lot, so ideally they want cheap energy, cold temperatures and clean air … When computers get hot, they are less efficient and need to cool facilities.

In upstate New York we have 30 retired power plants. New York has cold temperatures, plenty of fresh water and we have clean air. We also have a lot of hydropower, so companies have gone where they can get hydro [power] for a lower market type. One of the largest cryptocurrency mining operations in the country is in Massena. They took advantage of the low energy cost.

Greenidge [a mining facility along the Finger Lakes] it is close to fresh water due to the heat produced. It requires expensive cooling technology, so they only use water, circulate it around the facilities to catch heat, and then pour it back into the lake. They have permission to extract about 130 million gallons of water per day from the lake. They have permission to release that water back into a class C trout creek at temperatures as high as 108 degrees in the summer. Trout sample signs of stress above 70 degrees Fahrenheit. It has a profound negative impact on the area’s wildlife, so area fishermen and hunters are very concerned.

Terreiro: What are other environmental concerns surrounding cryptographic mining companies in the state?

Kelle: Greenhouse gas emissions. When Greenidge bought it [the plant] and he did it again … he had been releasing zero admissions for years and is now maximizing his air permit for GHG emissions, which they could exceed depending on how many mining platforms they are putting in the facility.

There is severe noise pollution. If you have them all running 24 hours a day, 7 days a day … it literally looks like you’re standing on an asphalt with several jet engines blowing at you and the sound goes a long way.

These cryptocurrency mining operations [often] they sprout in low-income communities because they offer PILOT payment instead of taxes … instead of just paying property taxes directly [to the city] on the assessed value of the company, they make a fixed payment for a certain period of time, a certain amount each year, guaranteed. But it is often less than they would pay if they only paid the market rate.

For example, if you look at Greenwich, that facility, when it was a coal plant, paid a little less than a million dollars in its PILOT each year to the community. But if you look at Greenwich’s revenue – the last time I looked at it was in the third quarter of last year, when it had 7,500 computer processors, and now they’ve more than doubled it – they had $ 40 million in revenue and still only paid one PILOT about $ 150,000 to the community.

Terreiro: North New York State has about 30 retired power plants that could be targeted by other cryptographic mining companies. Are more companies trying to take advantage of this?

Kelle: There is already an active proposal for the Fortistar Power Plant in North Tonawanda from a Canadian company … there have also been announcements for other facilities, which are open to a contract with cryptocurrency mining operations.

They can offset their energy use by using hydroelectric power, but of course you have to look at opportunity costs. If we are using our hydroelectric power [for] cryptocurrency mining operations, this means that we will have to significantly increase our new energy infrastructure, as well as our entire state transmission system, to meet the energy demands of our existing energy, let alone the significant increase in all energy operations. mining of cryptocurrencies that are being added to the state.

Terreiro: Is there any concern that this bill might make state elected officials seem anti-technological?

Well, no, that’s just not true. New York State may be the cryptographic capital … [but] Mining doesn’t have to happen in New York State for them to keep doing exactly what they’re doing. Buying, selling and using cryptocurrencies can happen in this state and thrive in the state without allowing mining. The moratorium is only on real mining happening in New York.

Mining can still occur worldwide … [though] I wish it wasn’t like that. I would love to see all cryptocurrencies move to a form of validation that doesn’t use as much energy.

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