Crypto mining has been banned temporarily for two years by the governor of New York state. A moratorium to ban proof-of-work (PoW) crypto mining that is powered by carbon-based fuel was signed into law by Governor Kathy Kochul on November 22. New York state is the first U.S. state to ban energy-inefficient crypto mining activities. The bill to place a two-year moratorium on proof-of-work crypto mining was passed by the New York State Assembly in April, before heading to the state Senate for another round of voting.
Democratic Assembly member of New York State Anna R. Kelles in a tweet called the signing of the new bill into law “a huge win for our planet and a sign that New York is not afraid to lead the nation in our climate policy.”
PoW miners already operating in New York State will also be denied mining license renewals upon the expiration of their existing license. Mining permits will still be issued to electric energy facilities that use alternatives to carbon-based fuel.
Crypto Mining and the Environment
The earliest cryptocurrencies like Bitcoin and some other altcoins use the PoW consensus mechanism. The energy consumption of the PoW algorithm and its effects on the environment has long been identified by the crypto community and climate change lobbyists. The energy concerns of mining PoW cryptocurrencies have led to the invention of more energy-efficient consensus algorithms. Several existing PoW blockchains are moving to more energy-efficient consensus mechanisms like the Proof-of-Stake system (PoS). Ethereum recently migrated from PoW to PoS. Layer-1 blockchain projects tout words like green, eco-friendly, and sustainable in their whitepaper when describing their consensus mechanism and cryptocurrency – an indication of how seriously the crypto community has considered green practices. The Crypto Climate Accord (CCA), an open-source environmental initiative, inspired by the Paris Climate Accord and aimed at making cryptocurrencies green, was formed. A handful of PoW mining companies have transitioned to mining with renewable energy sources only in a bid to reduce the global carbon footprint.
The New York State governor in the released memorandum affirmed continued support for growth and business development in the blockchain industry. The governor said he recognizes the importance of creating economic opportunity in communities that have been left behind; and he would continue to invest in economic development projects that create the jobs of the future, ensuring that New York continues to be the center of financial innovation. The crypto space has been very receptive to green practices and the reduction of global greenhouse gas emissions attributed to crypto mining activities.