According to legislation that Governor Kathy Hochul signed on Tuesday, New York will be limiting cryptocurrency mining, which marks the first measure of its kind taken in the US.
Following the collapse of the FTX exchange earlier this month, the cryptocurrency industry has come under increased scrutiny.
However, the legislation in New York, which was approved by the state Legislature in June, is particularly focused on the environmental implications of crypto, according to a report by AP.
(Photo : GEOFF ROBINS/AFP via Getty Images)
Bryan Maacks stands beside his truck with a sign protesting the noise caused by the US Bitcoin facility in Niagara Falls, New York on October 24, 2022. - In the US city of Niagara Falls, residents accustomed to the soothing rumble of famous waterfalls have recently discovered a much less pleasant sound: the roar of bitcoin mining farms.
"Proof-of-work"
A two-year prohibition on new and renewal air permits for fossil fuel power plants that conduct energy-intensive "proof-of-work" bitcoin mining will be imposed by the new law.
Proof-of-work refers to the computer-based system that keeps track of and safeguards transactions involving bitcoin and other digital currencies.
The blockchain-based mechanism known as "proof-of-work" is what powers bitcoin and certain other cryptocurrencies.
The Department of Environmental Conservation must also evaluate how crypto mining affects the state's capacity to achieve its climate goals, according to the new law.
Environmentalists claimed that by allowing cryptocurrency mining firms to operate their own natural gas-burning power plants, New York was undercutting climate objectives.
Meanwhile, supporters of cryptocurrencies claimed that the law would hinder New York's economic growth.
Computers with specific hardware are needed for crypto mining that uses a large amount of electricity. According to an analysis by the U.S. Energy Information Administration, the yearly electricity consumption of bitcoin was similar to that of Hong Kong in 2019.
Read Also: Ethereum Will Undergo A Drastic Technological Shift That Will Decrease Its Carbon Emissions by 99%
Environmental Costs of Crypto Mining
The phenomenal growth in cryptocurrency usage over the past couple of years has sparked a heated debate regarding the harm that the environment is experiencing, particularly at a time when the world is attempting to cut carbon emissions.
More than 20 members of the US House of Representatives who are all Democrats signed a letter earlier this year to the head of the Environmental Protection Agency (EPA) expressing their concerns about the environmental costs associated with crypto mining.
They argued that in addition to using an excessive quantity of energy, Bitcoin mining had an impact on the locals. The letter said that "people living near crypto mining facilities are already suffering the effects of air, water and noise pollution from these facilities."
In 2022, the world's cryptocurrency mining sector is predicted to use 131 Terawatt Hours of electricity. It uses more energy than a number of nations, including Chile, Norway, and Denmark.
The miners are looking for accessible, perhaps renewable, low-cost electrical sources. According to Cambridge University, 61% of the energy utilized for bitcoin mining originates from burning fossil fuels.
Related Article: Bitcoin Miners Sell at Discount; JPMorgan Says it Could Pressure Token Price but Benefits Investors
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Written by Jace Dela Cruz
