New York state awaits crypto mining moratorium decision

Earlier this month, New York State lawmakers turned their heads to the world of cryptocurrencies by approving the country’s first state moratorium on the reuse of power plants that burn fossil fuels by turning them into cryptographic mining operations.

These operations use computer walls. To earn digital currency like bitcoin, they solve complicated puzzles, which verify new transactions. It is now up to Gov. Kathy Hochul to decide whether to sign the moratorium as law.

In Penn Yan, a town on Lake Seneca, the largest of the state’s majestic Finger Lakes, Kim Holtzman takes a kayak and heads out into the water, paddling north. Seneca Lake has been a part of Holtzman’s life since she started coming to camp here as a child.

“It just means the world to me, the Finger Lakes,” Holtzman said. “It’s where I met my husband. Many of my friends are from here.”

Holtzman and her husband moved here full time about two years ago. “It’s beautiful, and Greenidge has changed that for us,” Holtzman said.

Kim Holtzman takes a kayak break on Lake Seneca earlier this month. (Lily Jamalil / Market)

He is referring to the Greenidge Generation, the lakeside power plant near Dresden, which is half an hour from his home. Right in front, there is a giant metal tube protruding over part of the lake from the shore. The plant depends on this tube to take water. Use it to cool your equipment, and then the water is discharged back into the lake, warmer than before. Holtzman and the neighbors are worried that it will harm the wildlife here.

They don’t like the noise either. “At night, when it’s quiet, you can hear a roar under it all the time,” Holtzman said.

For decades, this facility burned coal to generate electricity until it was closed in 2011, for good, residents thought. Three years later, an out-of-state private equity firm bought the plant and converted it to burn a different fossil fuel: natural gas. Today, much of that energy is used to undermine cryptocurrency.

“Suddenly, it became bitcoin,” Holtzman said.

A spokesman for the Greenidge plant says it is a model for meeting strict environmental standards while creating new jobs. William Talton holds one of those jobs. He travels from an hour away in Rochester, New York, to work as head of cryptography at the plant’s data center.

A tube comes out along Lake Seneca.
A large metal tube used by the cryptographic mining plant of the Greenidge generation exits to Lake Seneca. Opponents like Kim Holtzman say the facility’s air and heat pollution is detrimental to wildlife on the lake, while the company says it is a model for meeting strict environmental standards while creating new jobs. (Lily Jamail / Marketplace)

“The opportunity it has given me and my family has been incredible, not just financially, but just the opportunity to experience what the future looks like with cryptocurrency and things like that,” Talton said.

But opponents argue that the plant’s air and heat pollution is harming the region’s tourism industry, which attracts millions of visitors and billions of dollars each year. The bill just passed by New York lawmakers would enact a two-year moratorium to prevent cryptocurrencies from reusing plants like Greenidge, even if existing facilities could continue to operate.

“Basically, it’s,‘ We’ve abandoned our fossil fuel-based power plants that are being phased out in New York State, ’” said Assemblywoman Anna Kelles, who sponsored the project.

Kelles said the energy industry’s heavy use of energy will make it difficult for the state to meet its stated plan to reach net zero by 2050. “Literally, it’s going to send us in the wrong direction of our climate goals, which is to get out of fossil fuels.”

Cryptographic industry groups warn that restrictions such as the moratorium could drive away cryptographic investments and jobs from New York.

A road leads to Greenidge Generation.
The Greenidge generation in Dresden, New York, uses natural gas, a fossil fuel, to extract cryptocurrencies, including bitcoin. (Lily Jamali / Market)

“New York would be the only state with a book moratorium, and I think that sends a very negative signal to an industry that is basically being welcomed elsewhere,” said John Olsen of the Blockchain Association.

Gov. Kathy Hochul has also been criticized for taking money from the crypto industry.

“It’s time for him to stand by New Yorkers and not with the crypto billionaires who are helping fund his campaign and his lieutenant governor’s campaign,” said Abi Buddington, a Seneca Lake resident who is organizing against Greenidge.

The Hochul office said in a statement that “political donations have no influence on government decisions.” You have until December to make a decision.

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