After the Senate vote in June, the moratorium on Bitcoin mining was passed by the Governor of the State of New York in the USA. This new law institutes a 2-year moratorium on all mining using fossil fuels. No other state in the country has ever passed such a restrictive law, so it’s not surprising that it has provoked strong reactions, including in the spheres of power. This moratorium comes at a time when the mining industry is experiencing enormous difficulties in New York State.
2 years without new crypto mining license
Like GreenPeace, several actors consider bitcoin mining to be a destructive activity. This is obviously the case with the authorities of the State of New York in the United States.
Kathy Hochul, the governor of New York has signed a law instituting a two-year moratorium on all fossil fuel powered crypto mining activity. This simply means that for 2 years, no permits will be granted to any new crypto mining company using fossil fuel.
Active miners are not spared from this law either. From now on, they are prohibited from renewing their licenses or expanding their mining operations unless they use green energy.
“This law is a victory for the planet,” said Anna Kelles, a New York state legislator. She had fought last June to get this law passed in the Assembly and then in the Senate.
This moratorium on crypto mining is a first in the United States. Although states regularly express concerns about the environmental impact of crypto mining, none of them had gone so far as to ban this activity.
New York Mining Ban Debated
Many actors do not hide their annoyance with this restriction. When the bill was passed in the Senate, it was rejected by 27 of the 63 senators who voted. After the Governor signed the bill into law, critics once again came forward.
Kevin Zhang, an executive at the mining company Foundry believes that the moratorium is simply meant to fight crypto. If the motivation was to protect the environment, the moratorium should extend to other industries, he told CNBC.
Not only is this a clear signal that New York is closed to the business of bitcoin miners, but it sets a dangerous precedent for picking a particular industry to ban.Kevin Zhang, executive of the mining company Foundry
Kevin Zhang’s concerns may be true. According to data from the U.S. Energy Information Administration, nearly 75 percent of New York State’s generation comes from fossil fuels. As long as that fossil fuel continues to power other industries, banning fossil-fueled crypto mining has no environmental impact. The decision should have been extended to all industries or else develop more renewable energy sources.
Unsurprisingly, the mayor of New York City seems to be equally unhappy with the moratorium. In June, Eric Adams had already urged the governor of New York to reject this law banning crypto mining despite the favorable vote of the members of the parliament. This Veto unfortunately did not happen.
Commenting on the entry into force of the moratorium, the mayor of New York believes that the financial innovation that crypto brings can be combined with environmental protection.
Eric Adams obviously does not intend to implement the moratorium as such. Instead, he plans to bring together pro and anti moratoriums to find a balance between industry development and legislative needs.
I’m going to work with legislators who are in favor and those who are concerned, and I think we’ll come to some common ground.Eric Adams
The mayor of New York City is a strong supporter of cryptocurrency. Notably, in November 2021, he announced that he collects his mayoral salary in Bitcoin. In addition, Eric Adams is working to make New York a crypto hub.
New York, a land of mining hostile to miners
Due to the strong crypto crackdown in China and social unrest in Kazakhstan, many crypto miners have turned to the United States. With 37.8 percent of the Bitcoin hash rate, the country leads the way in Bitcoin mining worldwide.
Due to its significant energy resources, New York State concentrates much of this mining activity. In fact, about 20% of the cryptocurrency mining done in the United States is done in the state. Still, the mining players are facing enormous challenges in addition to the recently passed moratorium.
In the city of Niagara Falls, for example, residents routinely castigate the noise made by mining machines. This forces the mining industry to spend thousands of dollars building noise barriers. Some of them are sometimes forced to stop operations and/or have lawsuits filed against them.
In addition, the prolonged Bear market is deeply affecting the mining industry in the USA. Compute North has filed for Chapter 11 bankruptcy protection. Marathon Digital and Riot Blockchain, two major mining companies are also suffering from the current situation. This wave goes beyond the United States. Some players in the ecosystem like Binance were trying to rescue the crypto industry.
Mining players are suffering from the bear market, social pressure and regulatory constraints. The law passed in New York State will affect the mining industry. This moratorium will also have no environmental impact. The fossil fuel used by mining will simply be diverted to other industries. The New York authorities would be better off developing renewable energy sources rather than blaming bitcoin for the current climate crisis.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.