New York has just become the first state to ban certain types of cryptocurrency mining in an effort to address environmental concerns over energy-intensive systems.
“I will ensure that New York continues to be a financial center, while also taking important steps to prioritize the protection of our environment,” said New York Governor Kathy Hochul in a message after signing the law into law on November 22.
The new law temporarily suspends the issuance and renewal of air permits to companies that have converted some of the state’s old fossil fuel plants into cryptocurrency mining sites.
But the ban does not affect individual cryptocurrency miners.
The law is specifically aimed at financial companies in the state that use a lot of power by using the proof of “proof-of-work” – this process is sometimes used millions of advanced computers to check and secure transactions in bitcoin and other virtual ones. money.
Crypto mining can be environmentally harmful by generating electricity by burning coal, natural gas and other fossil fuels.
After China banned bitcoin mining in 2021, New York became a popular place for mining digital currency due to the availability of cheap energy from Niagara Falls and closed power plants.
However, as companies flocked to the region, climate advocates began sounding the alarm on crypto mining’s potential environmental impact.
“Not only is crypto harmful to the environment, but communities in upstate New York could suffer as abandoned coal plants return from the dead as ‘zombie plants'” to buy crypto all day, every day,” Richard Schrader, the New York-based Director of Law and Policy for the non-profit Natural Resources Defense Council said in a statement.
The new law also requires the New York Department of Environmental Protection to study the impact of the crypto mining industry on the environment during the two-year moratorium as the state tries to reduce its carbon footprint.
On a national level, US crypto mining produced about 25 to 50 million metric tons of carbon pollution according to a White House report. That’s equivalent to driving 20 to 40 million motor vehicles for one year according to the Environmental Protection Agency.
The crypto industry has tried to address concerns about its energy and gas consumption.
In September, Ethereum, the largest blockchain behind bitcoin has changed to a more powerful way to verify crypto transactions that are made on the platform, called proof-of-stake ( PoS).
This upgrade is expected to reduce Ethereum’s carbon footprint by more than 99% according to its website.
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