New York initiates mining ban

A three-year ban on mining operations is being prepared in the state of New York. The Senate has yet to wave through the bill.

Crypto mining could soon be a thing of the past in New York. The Senate has a Bill “To set up a moratorium on the operation of crypto mining centers”. The draft provides for a three-year ban for mining operations that do not meet environmental requirements.

Mining on the siding

The trigger for the draft is the immense energy consumption of mining plants, which endangers the state’s climate targets. The “Climate Leadership and Community Protection Act”, which came into force in 2019, prescribes a reduction in greenhouse gas emissions of 85 percent by 2050 in the state. It is therefore the task of politics to “preserve, improve and protect natural resources and the environment”.

The energy requirements of mining companies, which are often “in closed or converted power plants for fossil fuels”, would therefore be in contradiction to the declared climate targets. The operation of mining centers would eventually “greatly increase energy consumption in New York State” and “irreparably damage” compliance with the climate protection law, according to the draft.

A single cryptocurrency transaction consumes the same amount of energy that the average American household uses in a month, with an estimated level of global energy consumption equal to that of the country of Sweden.

The draft therefore calls for a three-year moratorium on mining facilities. Operators are only allowed to keep their systems connected to the grid if they have passed a “general environmental impact assessment”. This procedure evaluates plants on the basis of their greenhouse gas emissions and the associated “effects on water quality, air quality or wildlife”. Centers that do not meet the requirements may not be built or continued to operate. After the three years have elapsed, the conditions expire again. The Senate still has to approve the draft after a public hearing.

Problem case power consumption

If the law comes into force, it could have far-reaching consequences for the domestic mining industry. Heavyweights like Riot Blockchain and Greenidge have aggressively increased their hardware resources in recent months – both of which operate their facilities in New York. If they do not meet the criteria, they could be forced to outsource their operations.

In China, too, the electricity consumption of mining plants is gradually arousing suspicion. How Reuters reported, inspections of mining data centers were carried out in Beijing a few days ago, which checked their power consumption. The investigations should provide information about the actual consumption of the systems. In future, operators will also have to report to the city the amount of electricity they use for mining. Just a few weeks earlier decided the government of Inner Mongolia, one of the hash rate hubs in the Middle Kingdom, put an outright mining ban in the region.