New York just became the first country to ban some types of cryptocurrency mining in order to address environmental concerns about the power of the policy.
“I will ensure that New York continues to be an economic hub, and take the necessary steps to prioritize the protection of our environment,” New York Governor Kathy Hochul said in a message after signing the bill into law on Nov. 22.
The new law temporarily suspends the issuance and renewal of air permits to companies that have turned some of the state’s oldest oil fields into cryptocurrency mining centers.
But the ban does not affect individual cryptocurrency operators.
The law specifically targets cryptocurrency mining companies in the state that spend a lot of energy using “proof of work” authentication – a process that sometimes uses millions of super-powerful computers to track and store transactions in bitcoin and other real-time transactions. money.
Mining crypto can produce carbon emissions from electricity generation through the burning of coal, natural gas and other fuels.
When China began to crack down on bitcoin mining in 2021, upstate New York became a popular digital mining center due to the availability of cheap energy from Niagara Falls and closed-circuit electricity.
However, as companies flocked to the area, climate activists began to cry out about the environmental damage of crypto mining.
“Not only is crypto harmful to the environment, but upstate New York could suffer if abandoned coal-fired power plants come back from the dead as ‘zombie plants’ that generate crypto all day, every day,” said Richard Schrader, New York Legislative Leader and Policy for non-profit Natural Resources Defense Council said in a statement.
The new law also requires the New York Department of Environmental Conservation to study the impact of the crypto mining industry on the environment during the two years the state plans to reduce its emissions.
Globally, US crypto mining produced approximately 25 to 50 million tons of carbon pollution according to a White House report. This is equivalent to driving 20 to 40 million gallons of gasoline for one year according to the Environmental Protection Agency.
The crypto industry has tried to address concerns about its energy use and emissions.
In September, Ethereum, the largest blockchain behind bitcoin, switched to a more robust way of verifying crypto transactions that take place on the platform, known as proof-of-stake (PoS).
This upgrade is expected to reduce the Ethereum price by 99% according to its website.
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