Pros, cons of cryptocurrency mining in upstate New York

Last month, the New York State Assembly voted to approve Democratic Assemblywoman Anna Kelles’ two-year moratorium on new cryptocurrency mining. The idea behind the bill is to give the New York State Department of Environmental Conservation time to conduct an environmental impact study of the practice.

The bill would prevent new permits from being issued for a very specific type of cryptocurrency operation, known as carbon-based mining operations and work tests, which use energy behind the counter.

The bill has yet to be passed in the state Senate and will be signed by Gov. Kathy Hochul before it can become law.

The appeal of cryptocurrency is that when using blockchain technology, financial transactions are instant, secure, and very difficult to track. But there is a downside to working test mining: it takes huge amounts of energy to run the thousands of computers used to “extract” coins.

That’s why MP Kelles said his bill is so focused.

“This particular type of cryptocurrency validation is called working proof, which is synonymous with cryptocurrency mining. There is no other method called mining. It has been found all over the world to use phenomenal amounts of energy compared to other forms of validation. , like the participation test, for example, “Kelles said. Capital tonight.

Cryptocurrency “mining” is not mining in the usual sense of the word. There are millions of computers competing with each other to validate transactions. The more computers a miner has, the greater the advantage and the more energy will be used.

Northern New York State is attractive to cryptocurrency miners for a variety of reasons, including plenty of clean air and water, relatively cold temperatures, and cheap hydroelectric power to power computers.

North New York State also has several old power plants ready to house these mining operations, some of which are being bought by listed companies. These companies are reusing power plants to make their own energy “behind the meter”, that is, it is produced and consumed on site.

“We’re a prime target,” Kelles said of the northern state.

One of the largest cryptocurrency mining operations in upstate New York is the Greenidge Generation, located on the shores of Lake Seneca in the Finger Lakes region. Critics, including Kelles, argue that the cryptographic mining taking place in Greenidge is harming the agrotourism and wine industry already established there.

The Greenidge Generation bitcoin mining facility is located on a former coal mine on Lake Seneca in Dresden. (Photo AP)

The assemblyman also argues that cryptocurrency mining is not a great job creator.

“Mining itself is not a great job creator because computers, in the first place, are doing all the work. But secondly, what is really important is that the algorithm they are running is very simple. It’s not like the algorithm for the Skype app … and so it doesn’t take a lot of engineering work … to maintain, ”Kelles said.

“[Cryptocurrency mining] is a very small fraction of the jobs compared to [agritourism]said Kelles.

But proponents of cryptocurrency, including Republican Assemblyman Robert Smullen, argue that New York is a world leader in financial services, so why shouldn’t the state lead in cryptocurrency as well?

Smullen also criticizes Kelles’ characterization of the jobs created by such operations.

“These are good jobs because they’re electrical jobs, essentially, that’s what they are, and they’re running all these facilities,” Smullen explained. “This is a new form of advanced manufacturing.”

In fact, the IBEW union is a supporter of cryptocurrency mining.

As for Greenidge Generation in particular and its plan to expand the 17,000 computers it currently has in operation, Smullen is not worried.

“[Greenidge] it’s probably a factory in a small part of town, so I don’t think it’s disturbing any agritourism brand for the beautiful Finger Lakes area, ”Smullen said. Capital tonight.

What worries the Assemblyman so much is the possibility of a two-year moratorium on new cryptocurrency operations.

“In this industry, two years is literally the speed of light in the blink of an eye,” Smullen said. “This industry, the technical financial stuff, can go anywhere.”

The key, according to the assemblyman, is to get the miners to come to New York and then keep them here.

“This is the very important trade for the future of the financial services industry. During the pandemic, we saw that work in New York City, many of them could be done from anywhere. My concern then and now is that we have created an environment regulatory in this state that positively encourages the financial services industry, which will evolve over time with technology to stay in New York State, ”Smullen said.

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