![]() “This isn’t about an environmental impact from the work, it’s about energy use and whether it’s valid that that energy is for a specific operation.” “In some ways, all of the concerns that the industry had about this bill and about the rhetoric around it were valid,” said John Olsen, the Blockchain Association’s Albany lobbyist. The approach is called “proof of work,” and the more computing power a mining operation has, the more fees it can earn. Miners are engaged in a global competition to solve complex calculations that validate transactions, all in exchange for a fee. “It doesn’t change Bitcoin mining in New York… it doesn’t have a retroactive effect.”Ĭryptocurrency industry groups are alarmed by calls from environmental advocates to broaden the limits on the “proof of work” method underpinning Bitcoin and the push to take similar actions in other states. “It’s a lot of circus - media and politics but the effect is very minimal,” Martini-LoManto said. Blockfusion, when it was operating, ran on power from the grid, which is primarily hydropower. He supported the moratorium but said it should have gone further and prohibited any fossil fuel plants coming back online for any reason. The impact of the new law has already hit one company.īlockfusion, which owns a cryptocurrency mining facility in Niagara Falls that is currently idle due to an order by the city, lost insurance coverage because of the statewide moratorium, despite not being impacted, said CEO Alex Martini-LoManto. “The legislation has no impact on our operations, and we continue to invest and create good jobs at our facility,” said David Fogel, the CEO of Coinmint, which operates the up to 160 megawatt cryptocurrency mining facility in Massena. The moratorium bill exempted the only two power plants currently burning fossil fuels to run cryptocurrency mining machines, carving out any that had already submitted permit applications. “Any cryptocurrency company, whether proof of work or proof of stake, that is not already grandfathered in by New York’s singular crypto laws is unlikely to build their business in New York under current conditions because nobody knows who could be next on the chopping block.” “The sentiment pervading the crypto industry now is that New York is willing to use its climate goals to arbitrarily exclude any industry which is politically expedient to target,” Schneps said. He said the Rochester-based Bitcoin mining company has acquired two sites in other states and is focusing investments there. 29, 2021.Ĭryptocurrency businesses are already directing their investments elsewhere, said Kyle Schneps, Foundry’s director of public policy. The law is likely to scare off companies from coming to New York for fear of further restrictions, some owners said, and it comes as the digital currency market has also crashed following the bankruptcy of Bahamas-based crypto exchange FTX - leaving the industry with additional uncertainty.Ī cryptocurrency mining facility, in a former coal plant by Seneca Lake in Dresden, New York, is pictured on Nov. The region has an abundance of former power plants and manufacturing sites with unused electrical infrastructure that is appealing to the industry. The partial ban comes as upstate New York has become attractive to companies that mine digital currencies, including Bitcoin. Operations can continue at large and small sites across upstate New York, including a former aluminum smelter in Massena near the Canadian border and a former coal plant in Somerset near Niagara Falls. The law does not affect cryptocurrency mining that uses power drawn from the electric grid. They’ve also warned that the industry itself may not be compatible with the state’s new climate law that requires a steep reduction in emissions. ![]() The New York law “is a really important initial step towards getting that information and towards better understanding how cryptocurrency miners are turning coal and gas into Bitcoin, basically, and what the impacts of that are,” she said.Įnvironmental groups pushed for the temporary pause on some types of cryptocurrency mining in New York because of concerns that old fossil fuel plants would be brought back online or ramped up to run computers to earn cryptocurrency - a process that uses an extraordinary amount of energy. “We need to better understand what is happening and to enforce the environmental laws that we have against coal and gas plants that are being operated primarily for the benefit of cryptocurrency operations,” Sierra Club staff attorney Megan Wachspress said in an interview.
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