News JVTech Bitcoin: New York announces good news for the environment, but bad news for cryptominers
With the threat of an energy crisis, some governments are already taking action. In the first line of fire, unsurprisingly, are Bitcoin miners and other cryptocurrencies that require the use of computing power. To save electricity, the state of New York has just issued an ultimatum to crypto mining professionals.
New York cryptominers against the wall
As you no doubt know, to be mined Bitcoin requires a great deal of computational power which is obtained by permanently working computer components such as graphics cards. This is also the case for all other cryptocurrencies based on the operation by Proof of Work (PoW). As a result, these virtual currencies are undeniably energy intensive given their abundant electricity consumption. While various countries tend to organize massive energy savings, the mining industry must also comply with new measures.
It is in the United States, precisely in the state of New York, that a new law has appeared aimed at cryptominers. This new announcement will drastically limit bitcoin miner activity in New York State. In fact, they are now forced to mine their BTC only using renewable energy. This is of course good news for the environment, but for mining professionals it’s a different story…
This announcement, published last Tuesday, is forcing crypto miners to move out of New York if they cannot provide ecological mining. All mining companies using carbon energy will be permanently banned from the state. For now, this restriction only affects this territory, but other states may take similar measures in the future. This news is likely to affect the first cryptocurrency since New York State is the country’s fourth-largest Bitcoin miner.
Are there alternatives to Bitcoin miners?
Although quite restrictive, this new measure gives minors the opportunity to show a more environmentally responsible view of their activity. However, investing in ecological infrastructure remains costly and some will certainly have to find alternatives.
The first option could be to fall back on another cryptocurrency. Indeed, in the crypto sector, there are not only currencies based on proof of work. Other virtual assets operate on proof of stake, such as the second largest cryptocurrency, Ethereum (ETH). To be mined, it does not use the computing power of graphics cards, but miners’ money.
However, this scenario seems unlikely as mining companies would be forced to sell all their machines, which are obsolete in this context. The most realistic is still the relocation of some miners to other regions.
Quebec, the European Union, the United States, more and more governments are tackling the problem of Bitcoin’s energy consumption. Given the context, it is certain that these questions must be asked. Nevertheless, some may take advantage of this argument to permanently disable Bitcoin. As a real enemy of traditional banks, the creation of Satoshi disrupted some institutions for years.
This is the case of the Chinese government, which in June 2021 definitively banned mining on its territory. Despite these measures, the clandestine mining companies are thriving and the country is still the second largest producer of Bitcoins in the world.