New York is the first state to ban certain types of crypto mining

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New York just became the first state to ban cer­tain types of cryp­tocur­ren­cy min­ing in an effort to address envi­ron­men­tal wor­ries over the ener­gy-inten­sive process.

“I will ensure that New York con­tin­ues to be the cen­ter of finan­cial inno­va­tion, while also tak­ing impor­tant steps to pri­or­i­tize the pro­tec­tion of our envi­ron­ment,” New York Gov­er­nor Kathy Hochul said in a mes­sage after sign­ing the leg­is­la­tion into law on Nov. 22.

The new law tem­porar­i­ly freezes the issuance and renew­al of air per­mits to com­pa­nies that have trans­formed some of the state’s old­est fos­sil fuel plants into cryp­tocur­ren­cy min­ing hubs.

But the ban does­n’t impact indi­vid­ual cryp­tocur­ren­cy miners. 

The leg­is­la­tion is specif­i­cal­ly aimed at cryp­tocur­ren­cy min­ing com­pa­nies in the state that con­sume large amounts of ener­gy by uti­liz­ing “proof-of-work” authen­ti­ca­tion — the process that uses some­times mil­lions of high-pow­ered com­put­ers to track and secure trans­ac­tions in bit­coin and oth­er vir­tu­al currencies. 

Min­ing cryp­to can pro­duce harm­ful emis­sions by gen­er­at­ing elec­tric­i­ty through burn­ing coal, nat­ur­al gas and oth­er fos­sil fuels.

After Chi­na began crack­ing down on bit­coin min­ing in 2021, upstate New York became a pop­u­lar hub for dig­i­tal cur­ren­cy min­ing due to the avail­abil­i­ty of cheap ener­gy derived from Nia­gara Falls and shut­tered pow­er plants.

How­ev­er, as com­pa­nies flocked to the region, cli­mate advo­cates began ring­ing the alarm over cryp­to min­ing’s poten­tial envi­ron­men­tal harm. 

“Not only does cryp­to take a toll on the envi­ron­ment, but com­mu­ni­ties in upstate New York could suf­fer as once-aban­doned coal pow­er plants come back from the dead as ‘zom­bie plants’ that mine cryp­to all day, every day,” Richard Schrad­er, the New York Leg­isla­tive and Pol­i­cy Direc­tor for the non-prof­it Nat­ur­al Resources Defense Coun­cil said in a state­ment.

The new law also requires New York’s Depart­ment of Envi­ron­men­tal Con­ser­va­tion to exam­ine the cryp­to min­ing indus­try’s impact on the envi­ron­ment dur­ing the two-year mora­to­ri­um as the state seeks to reduce its car­bon footprint.

On a nation­al lev­el, U.S. cryp­to min­ing pro­duced about 25 to 50 mil­lion met­ric tons of car­bon pol­lu­tion accord­ing to a White House report. That’s rough­ly the equiv­a­lent of dri­ving 20 to 40 mil­lion gaso­line-pow­ered cars for one year accord­ing to the Envi­ron­men­tal Pro­tec­tion Agency.

The cryp­to indus­try has attempt­ed to address con­cerns about its ener­gy con­sump­tion and car­bon emissions.

In Sep­tem­ber, Ethereum, the largest blockchain behind bit­coin switched to a more ener­gy effi­cient method of val­i­dat­ing cryp­to trans­ac­tions that take place on the plat­form, known as proof-of-stake (PoS).

This upgrade is expect­ed to low­er Ethereum’s car­bon foot­print by over 99% accord­ing to its web­site.

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