- New York is cracking down on bitcoin mining that uses carbon as a power source.
- New York state’s Bitcoin mining ban might have several follow-on effects.
New York State Senate has passed the bill to ban BTC mining operations that depend on carbon as power sources. They passed the bill after an early morning vote on Friday. However, the State’s governor Kathy Hochul still needs to sign the bill before becoming law.
You’d recall that the state assembly had previously passed the bill in April. According to the lawmakers supporting the bill, there is a need to reduce the State’s carbon footprint. Hence, the ban on mines that derive their power from burning fossil fuels.
Related: Proposed PoW ban in New York is scaring away investors: Kevin O’Leary
New York is setting an example for other states
If the governor signs the bill, the state regulators won’t approve or renew permits for any proof-of-work company for the next two years. However, if such proof-of-work companies switch their power sources to 100 percent renewable energy, the regulator can renew their permits.
Many top crypto players have shared their opinion about the follow-on effects of this bill approval. President of the Chamber of Digital Commerce, Perianne Boring, notes that this bill would push away businesses from the State.
He also said that the approval of this bill means that many unbanked residents in the State would remain bankless. One of Galaxy Digital’s top-level executives, Amando Fabiano, added that New York is setting a bad example that other states might follow.
It is important to note that the bill will become law immediately after the state governor signs it. Boring states that proof-of-work mining can lead the switch to more sustainable energy. According to him, estimates show that the sustainable energy mix of the BTC mining industry all over the world is a little below 60 percent.
However, the Chamber of Digital Commerce estimated that the sustainable electricity mix for New York miners is about 80 percent. “Hence, the bitcoin miners in New York are complying with the climate leadership and community protection act,” Boring added.
The follow-on effects of this bill
Many industry players believe that the bill’s approval will have a serious negative effect on the State’s economy. According to them, many local vendors will lose their jobs or contracts with these companies. Such vendors include construction workers, electricians, and engineers.
These industry players said the State would also be losing huge amounts of dollars in taxes. Boring said,;
some of these vendors earn up to $80,000 every year. That’s why many labor unions aren’t supporting this bill.
Nevertheless, some miners believe that they have several other states to locate their mining businesses apart from New York. Darin Feinstein, a co-founder with Core Scientific, said, “Georgia, Wyoming, North Carolina, Texas, and North Dakota are states with friendlier policies for bitcoin mining.”
For instance, many BTC miners are choosing Texas for various reasons apart from its crypto-friendly policies. The State has flared natural gas. Miners have access to sufficient renewable energy and competitive power grid options. More importantly, most of its lawmakers are crypto-friendly.
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