New York Signs Moratorium on Cryptocurrency Mining
New York has become the first state in the United States to impose a temporary moratorium on any new fossil fuel-powered cryptocurrency mining activities.
New York Governor Kathy Hochul signed a law on Tuesday a two-year moratorium on proof-of-work (PoW) cryptocurrency mining operations. The law states that for the next two years unless a PoW mining operation uses 100% renewable energy, it will not be allowed to renew or expand permits and will not allow any new entrants to come online. According to reports by Decrypt, a memo for the bill reads:
The law will prohibit Environmental Conservation Law permits from being issued for two years to proof-of-work cryptocurrency mining operations that are operated through electric generating facilities that use carbon-based fuel.
The Bill was first approved by the New York State Assembly in April and passed in June by the State Senate. Hochul explained her motivation for the bill explaining that the move is “a key step for New York as we work to address the global climate crisis.” She added that she is eager to “ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of our economy.”
Crypto mining is the process by which miners generate new blocks and are rewarded for that. It makes up a crucial part of the crypto economy but PoW-based mining requires powerful computers to solve mathematical equations to validate transactions and have thus naturally come under the concern of many environmentalist which have raised concern over the alleged negative climate impact. A PoW consensus mechanism is what underpins Bitcoin and many other popular cryptocurrencies such as Litecoin, Dogecoin, Monero, and Ethereum Classic. Ethereum, the second-largest cryptocurrency until recently utilised a PoW consensus mechanism but transitioned over to a less energy-intensive proof-of-stake (PoS) model.
Hochul commented on regulator’s responsibility toward climate protection adding:
I am signing this legislation into law to build on New York’s nation-leading Climate Leadership and Community Protection Act, the most aggressive climate and clean energy law in the nation, while also continuing our steadfast efforts to support economic development and job creation in upstate New York.
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