There is a two-year backlog in issuing new air permits and renewing existing ones for fossil fuel power plants used in mining due to the stringent “proof-of-work” authentication required by environmental law. Government efforts to mitigate climate change may also be hampered by the mining of cryptocurrencies, which should be looked into by the Department of Environmental Conservation. The launch of a cryptocurrency mining business in New York could expose you to stiff competition. Governor Kathy Hochul of New York was the first to pass legislation targeting cryptocurrency mining. After New York’s example, other states began to implement similar policies.
It was reported in The Hill in October that during a reelection debate, the governor did not commit to signing the bill. Lee Zeldin, her main opponent, has said he would not sign the proposal into law even if he had the power to do so. The state assembly passed the bill in June, but it wasn’t sent to Governor Hochul’s office until Tuesday of this week. The possibility of it becoming a rule was always remote.
The significance of certain events in the bitcoin ecosystem is sometimes downplayed by those involved. For instance, Ethereum has only recently finished switching to the “proof-of-stake” method, which uses much less energy than the previous system but requires confirmation from a much smaller number of users. The massive amount of energy used in cryptocurrency mining, especially by mining with proof-of-work algorithms, has raised concerns from politicians and environmental advocacy groups alike. This computationally intensive process raises electrical grid demands and has even prompted some New York mining companies to construct natural gas-based power plants to keep their operations running. In order to keep running, these power plants need to have access to this kind of energy. This is because more electricity is needed to run the machinery.
While acknowledging that proof-of-work mining has helped the industry grow, the Chamber of Digital Commerce warned that New York’s ban sets a “dangerous precedent.” Moreover, the law may cause some miners to leave New York altogether, casting doubt on the effectiveness of the regulation. As to whether this is also true for the other states, we simply don’t know. Texas’s government has been under intense pressure from Democratic senators to address the state’s inaction regarding the energy needs of cryptocurrency mining, but so far, the state has shown no signs that it will cave. There should be little surprise that crypto enthusiasts would oppose laws that limit their First Amendment rights.