The state of New York wants to ban new bitcoin mining operations, a move that some industry insiders fear could have a domino effect across the U.S.
The bill, which is swiftly making its way through the state capitol in Albany, calls for a two-year moratorium on certain cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions.
Unless a proof-of-work mining company uses 100% renewable energy, it would not be allowed to expand or renew permits, and new entrants would not be allowed to come online.
“New York will be left behind, losing to other states at best, and at worst, other more progressive nations.
Crypto mining company Coinmint, for example, operates a facility in a former Alcoa aluminum smelter in Massena, which taps into the area’s abundant wind power, plus the cheap electricity produced from the dams that line the St. Lawrence River. The Massena site, at 435 megawatts of transformer capacity, is billed as one of the largest bitcoin mining facilities in the U.S.
The sustainable energy mix of the global bitcoin mining industry today is estimated to be just under 60%, and the Digital Chamber of Commerce has found that the sustainable electricity mix is closer to 80% for its members mining in the state of New York.
“The regulatory environment in New York will not only halt their target – carbon-based fuel proof of work mining – but will also likely discourage new, renewable-based miners from doing business with the state due to the possibility of more regulatory creep”.
Data from digital currency company Foundry shows that New York’s share of the bitcoin mining network dropped from 20% to 10% in a matter of months, as miners begin migrating to more crypto-friendly jurisdictions in other parts of the country.
Each of these facilities drives significant economic impact with many local vendors consisting of electricians, engineers, and construction workers. An exodus of crypto miners, according to experts, could translate to jobs and tax dollars moving out of state.