The law, approved by Gov. Kathy Hochul, will make New York the first state in the US to impose a moratorium on cryptocurrency mining.
The New York State Senate has approved a controversial Proof-of-Work (PoW) mining ban bill that would ban any new bitcoin (BTC) mining operations in the state.
The PoW mining ban law was first passed by the state assembly in April. It aims to ban all new mining operations in the state for the next two years. There is now a bill in the governor’s office that, once approved, will make New York the first state in the United States to impose a moratorium on cryptocurrency mining.
The status of the bill as of 3 June. Source: New York State Senate.
PoW mining consensus is mainly used by bitcoin miners and is considered one of the most secure and decentralized mining methods. However, this practice is controversial because it requires incredibly high energy costs.
In voting on the bill, many senators went from hesitation to approval, saying they were concerned about carbon emissions.
The bill would not only ban new mining operations, but also deny license renewals for those already working in the state. Any new PoW mining operation in the state can only operate if it uses 100% renewable energy.
Bitcoin’s consensus mining mechanism has been one of the hottest topics of discussion among politicians, backed by environmentalists and billionaire lobbyists supporting Proof-of-Stake mining consensus, which is far less energy intensive. Greenpeace and Ripple (XRP) co-founder Chris Larsen advocated a code change for bitcoin.
Politicians often only focus on the high energy consumption of bitcoin miners and ignore the fact that much of that energy comes from renewable sources, especially in New York where 50% of energy comes from renewable sources.
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Criticism of PoW mining gained momentum in the midst of a bull run last year. However, late last year, a report by the MicroStrategy-led Bitcoin Mining Council highlighted that more than 60% of the electricity consumption on the BTC network comes from green sources.
Bitcoin’s sustainable use of energy compared to other industries. Source: BMK
The European Parliament proposed a similar ban on PoW mining, but amended the proposal to lift the ban amid growing public scrutiny.
Experts believe that New York’s decision to ban PoW mining will have a domino effect, and other states may follow suit. The US currently leads the world in bitcoin mining hashrate, accounting for 38% of the mining power of the network.