Cryptomining Poised to Take a Hit in This State

Landmark environmental measure slowing down operations passes New York state Legislature
By Newser Editors and Wire Services
Posted Jun 3, 2022 12:03 PM CDT
Landmark Cryptomining Bill Heads to Governor's Desk
The Greenidge Generation bitcoin mining facility, in a former coal plant by Seneca Lake in Dresden, NY, is shown in this photo from Nov. 29, 2021.   (AP Photo/Ted Shaffrey, File)

A milestone environmental measure designed to tap the brakes on the spread of cryptocurrency mining operations burning fossil fuels in New York has passed the state Legislature. The closely watched bill approved Friday by the state Senate would establish a two-year moratorium on new and renewed air permits for fossil fuel power plants used for energy-intensive "proof-of-work" cryptomining. Proof-of-work is the blockchain-based algorithm used by bitcoin and some other cryptocurrencies. The bill—which passed the the Legislature's lower chamber in April and which supporters say is the first of its kind—now goes to Democratic Gov. Kathy Hochul, per the AP. The governor has said she wants to make sure any legislation balances economic and environmental concerns.

Environmentalists who lobbied for the bill said natural gas-burning power plants being used for cryptomining operations threaten the state's ability to meet its long-term climate goals. "Gov. Hochul signing this legislation sends a signal that New York state is serious about meeting its climate mandates," said Liz Moran of Earthjustice. "It shows us that we cannot be repowering fossil fuel power plants for the purposes of private gain in New York, especially as we're looking to move away from fossil fuels entirely." Supporters of the cryptocurrency industry said the measure would crimp economic development in New York. The Blockchain Association, an industry group, said it would prompt mining operations to move to other states.

Cryptocurrency mining requires specialized computers that consume huge amounts of energy. One study calculated that as of November 2018, bitcoin's annual electricity consumption was comparable to Hong Kong's in 2019. A coalition of environmental groups has separately been urging the Hochul administration to deny the air permit renewal for Greenidge Generation in the Finger Lakes, which also produces power for the state's electricity grid. This measure, if signed into law, would not affect pending applications like the one from Greenidge. It also would require the state's Department of Environmental Conservation to perform an environmental impact assessment on how cryptomining affects the state's ability to meet its climate goals.

(More cryptocurrency stories.)

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