New York State signs the Cryptocurrency Mining Restrictions Act, setting a “dangerous precedent” for cryptocurrency advocates.
The mining companies of cryptocurrencies those hoping to be operational in New York State will certainly have to revise their plans. Governor Kathy Hochul signed into law restricting cryptocurrency mining in the country, making it the first state in the country to end the practice.
New York State signs into law restricting cryptocurrency mining
This law aimed at protecting the environment sets a two-year freeze on new permits and renewals for fossil fuel mining companies operating on “proof-of-work”. the Department of Environmental Conservation will also need to study whether and how crypto mining affects government efforts on climate change.
The bill was passed last June, but has only recently reached Kathy Hochul’s desk. And it was not guaranteed to become law. The hill reports that the Governor did not commit to signing the measure during the election debate in October. Her main opponent, Lee Zeldin, said he probably wouldn’t sign her if he was able to.
A “dangerous precedent” for cryptocurrency advocates
Politicians and various environmental groups are concerned about cryptocurrency mining, especially mining involving the “proof-of-work” mechanism, which consumes far too much energy. The calculation process puts a huge strain on the electricity grid, some specialized companies have even set up natural gas plants to run their operations. The cryptocurrency world has at times tried to minimize its impact. For example, Ethereum recently made a major change and moved to proof-of-stake, which is much less energy intensive.
Hard to know if other states will follow suit. Democratic senators have been pressuring Texas to take action on crypto mining’s energy demands, but the state government has yet to make a decision. Unsurprisingly, crypto advocates have also backed away from laws restricting their activities. The Chamber of Digital Commerce argue that New York law sets a “dangerous precedent” and that proof-of-work mining plays an important role in economic growth. There is also the question of the effectiveness of this measure: this law could lead some minors to less restrictive states.