New York cracks down on carbon-based crypto mining • The Register

New York State has banned a practice that is becoming increasingly common in the crypto mining industry – rescuing and repurposing mothballed fossil fuel facilities to provide power solely for mining digital currencies.

Gov. Kathy Hochul yesterday passed legislation that has been in the works since May 2021, imposing a two-year moratorium on applications or permits for “any power-generating facility that uses a carbon-based fuel and that is wholly or partially behind the power-metering of electrical energy, Consumed or used by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions. This also includes applications for the extension of such permits.

The bill cites the contribution of dirty fuel plants to climate change at a time when the state has committed to reducing greenhouse gas emissions by 85 percent by 2050, with “net-zero emissions across all sectors of the economy by then.”

While noting that the industry is growing in New York, the bill states, “The continued and expanded operation of cryptocurrency mining operations that employ proof-of-work authentication methods to validate blockchain transactions will be encouraged greatly increase energy use in the state of New York, and impact compliance with the Climate Leadership and Community Protection Act.”

All existing crypto mining companies in the state are now subject to a general environmental impact statement detailing the amount of energy used, the source of that energy and its impact, its emissions, and the impacts it may have on public health, water use, and water consumption , to be measured. and “social and economic costs and benefits, if any”. The statements will be available for public comment and the Department of Environmental Conservation will hold hearings on the matter in each region of the state.

Since when do crypto miners take over power plants?

The crypto mining boom in the US has largely been driven by movements in China, which was once the epicenter of global mining and essentially shut down the industry. Companies looking for cheap electricity then settled in the states, which now account for about 38 percent of the world’s miners. Globally, bitcoin mining uses more electricity than Finland.

The cost of this shift is measurable. Montana environmentalists watched in horror as mining company Marathon came across Hardin Generation Station, a 115-megawatt coal-fired power plant, in 2021. With a data center now on site, the station emitted 187,000 tons of CO₂ in the second quarter, an increase of more than 5,000 percent over what was issued in the same period in 2020.

“That doesn’t help old ladies freeze to death, it serves to enrich a few people while also destroying our climate for all of us,” said Anne Hedges, co-director of the Montana Environmental Information Center The guard. “Anyone concerned about climate change should have nothing to do with cryptocurrency, it is a climate catastrophe.”

Jamie Zawinski – who named the Mozilla project and was one of the original Netscape developers – narrated earlier this year The registry There was “literally nothing in the modern technology ecosystem more myopic than the gambling vehicle and ecological disaster we know as cryptocurrencies.”

Another company, Greenridge Generation, claimed to be bringing “a piece of the world’s digital future” to upstate New York when it revived a coal-fired power plant near the shore of Seneca Lake in the Finger Lakes region in 2020. The megawatts dedicated to Bitcoin here are said to be enough to “power more than 35,000 homes.”

The Scrubgrass facility in western Pennsylvania, which burns waste coal and was on the verge of closure, is now lined with shipping containers housing thousands of mining computers. Kentucky, meanwhile, is actively trying to attract investment from mining companies by exempting them from the electricity sales tax.

While big industry players like to be seen taking the environmental impact of their technology seriously, the cryptocurrency brigade is making headway — even if FTX, once one of the largest and most trusted exchanges, was recently revealed to be built on nothing.

Crypto players reacted negatively. The Chamber of Digital Commerce said in a statement: “Until now, no other industry in the state has been so marginalized because of its energy use. This sets a dangerous precedent for determining who can and cannot use electricity.

“That [proof-of-work] The mining industry has fueled economic growth, job creation, and inclusion for historically underrepresented communities in New York, while providing financial incentives to expand renewable energy infrastructure. As this legislation becomes law, we expect that mining companies, or those considering doing business in the state, will exit the US and head to friendlier regulatory courts across the US – a trend far too many industries in New York State witness daily recognize.

Likewise, Kevin Zhang of digital currency firm Foundry told CNBC, “Not only is it a clear signal that New York is closed to Bitcoin miner deals, it also sets a dangerous precedent for single-mining a specific industry to ban energy use .”

Others claimed the law will bar renewable energy miners from doing business in the state amid threats of increased regulation.

We suppose it all boils down to what you think is more unfair – crypto bros being blocked from opening a business in New York, or crypto bros destroying the planet for the sake of magical internet money. ®