The Cryptocurrency Industry is warning that the proposed Moratorium would lock New York out of the Benefits of an innovative New Technology, which has led to Massive Cryptocurrency Mining Facilities dotting Upstate New York that were once solely Power Plants.
The narrowly targeted Measure focuses on Gas Plants Selling or Providing Electricity directly to Cryptocurrency Miners who solve Complex Math Problems to Validate Transactions, and earn Bitcoin or other Digital Currencies.
Lawmakers in New York, who Head powerful Energy Committees, are pushing for a Three-year Moratorium on Permits, for Power Plants that burn Fossil Fuels to Mine Bitcoin, a Measure that would be the First of its kind in the Nation, and may be a Precursor to Regulatory Actions by Congress.
“In the tech space, three years might as well be three centuries,” said Kyle Schneps, Director of Public Policy for Foundry, a Cryptocurrency Company based in Rochester. “A statewide moratorium that has vague language and captures companies that use mostly renewables is a mistake.”
New York appears to be a Leading State for Cryptocurrency Mining, with multiple companies setting up Shop, in Communities across Upstate where Cheap Hydropower is readily available, Cheap Land, and underused Transmission Infrastructure.
While Holistic data is limited, Foundry, which runs a large Bitcoin Mining Pool, says 20% of its American Mining is done in New York.
The Issue in New York dovetails with the Debate Nationally, as Congress is also taking Notice of the Energy use for some Cryptocurrency Mining Operations and mulling potential actions. The “proof of work” process underpinning several Digital Currencies, including Bitcoin, is Energy intensive, requiring Large amounts of Computing Power. The Primary ongoing Cost input, after Hardware Installation, is Electricity Prices.
Some Companies have also pursued a more novel approach: Converting old Fossil plants that might be called on by the State’s Power Grid only a few times a year, to run more frequently to fuel Mining machines. The trend has alarmed Environmental groups and Residents near the plants.
A Moratorium cleared the State Senate last year in the Final days of Session, but fell Short in the Assembly, amid Opposition from a Key Labor Union. In a Statement, Governor Hochul's Office said it would Review the Legislation and stressed its Support for Protecting the Environment.
"Governor Hochul is taking bold, nation-leading actions to confront climate change head-on, and DEC (the Department of Environmental Conservation) is actively reviewing proposals regarding the role of cryptocurrency mining in New York's energy landscape, especially in light of the Climate Leadership and Community Protection Act," the State's Climate Law mandating Steep Emissions Reduction over the next Three Decades, Spokesperson Madia Coleman said in a Statement. "We will work with the legislature on these concerns and review the [cryptocurrency moratorium] legislation."
Environmental groups backing the Moratorium including: Earthjustice; the New York Public Interest Research Group and Sierra Club; warn that Unchecked Cryptocurrency Mining Endangers the State’s Climate Goals.
Even if the Mining Operations buy Renewable Energy, that will leave less Electricity to Power the State’s Existing and Future needs as more aspects of Daily Life rely on Electrons rather than burning Gas, they argue.
But the Concerns and the Push for a Moratorium run Contrary to the New York City Mayor Eric Adams' wholehearted embrace of Cryptocurrencies. The Mayor even Converted his First Paycheck to Ether and Bitcoin, adding a Transaction to be Validated using the Energy-intensive Process Environmentalists are decrying.
Assemblymember Anna Kelles (D-125th District, Ithaca) said she’s optimistic about getting a Moratorium passed this Legislative session, pointing to both the Assembly and Senate holding events focused on the issue since last year. “It’s an absolute priority,” said Sen. Kevin Parker (D-21st District), who carries the Measure in that Chamber and is the Energy Committee Chair. “Anything that does not fall in line with the [climate law] can’t continue to operate and so no one has made an argument to me from the crypto side that their projects are sustainable.”
Kelles emphasized that she’s Not looking to Block the Cryptocurrency Industry or the use of Blockchain, but solely targeting “proof of work,” which requires the solving of Complex Calculations to Validate Transactions and earn a Fee.
An alternative known as “proof of stake” where Coin Owners put up Collateral for a chance to Validate Transactions and earn Fees is less Energy Intensive, but has faced some Criticism for potentially being Less Secure. Ethereum, which supports another Popular Cryptocurrency, is moving toward a “proof of stake” Protocol this year.
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