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Here’s what’s in New York’s new bitcoin mining ban


Galaxy Digital's head of mining on what a proof-of-work moratorium would mean for New York State

Following an early morning vote in Albany on Friday, lawmakers in New York passed a bill to ban certain bitcoin mining operations that run on carbon-based power sources. The measure now heads to the desk of Governor Kathy Hochul, who could sign it into law or veto it.

If Hochul signs the bill, it would make New York the first state in the country to ban blockchain technology infrastructure, according to Perianne Boring, founder and president of the Chamber of Digital Commerce. Industry insiders also tell CNBC it could have a domino effect across the U.S., which is currently at the forefront of the global bitcoin mining industry, accounting for 38% of the world’s miners.

The New York bill, which previously passed the State Assembly in late April before heading to the State Senate, calls for a two-year moratorium on certain cryptocurrency mining operations which use proof-of-work authentication methods to validate blockchain transactions. Proof-of-work mining, which requires sophisticated gear and a whole lot of electricity, is used to create bitcoin. Ethereum is switching to a less energy-intensive process, but will still use this method for at least for another few months.

The push for an eleventh-hour vote came as leadership in the state capitol managed to flip some of the senators who were previously undecided.

Lawmakers backing the legislation say they are looking to curb the state’s carbon footprint by cracking down on mines that use electricity from power plants that burn fossil fuels. If it passes — for two years, unless a proof-of-work mining company uses 100% renewable energy, it would not be allowed to expand or renew permits, and new entrants would not be allowed to come online.

The net effect of this, according to Boring, would be to weaken New York’s economy by forcing businesses to take jobs elsewhere.

“This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State,” Boring tells CNBC.

It is a sentiment echoed by Galaxy Digital’s Amando Fabiano, who says that “New York is setting a bad precedent that other states could follow.”

As for timing, the law would go into effect as soon as the governor signs off.

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The irony of banning bitcoin mining

One section of the bill involves conducting a statewide study of the environmental impact of proof-of-work mining operations on New York’s ability to reach aggressive climate goals set under the Climate Leadership and Community Protection Act, which requires New York’s greenhouse gas emissions be cut by 85% by 2050.

Boring tells CNBC the recent swell of support in favor of this year’s proposed ban has a whole lot to do with this mandate to transition to sustainable energy.

“Proof-of-work mining has the potential to lead the global transition to more sustainable energy,” Boring told CNBC’s Crypto World, pointing to the irony of the moratorium. “The bitcoin mining industry is actually leading in terms of compliance with that Act.”

The sustainable energy mix of the global bitcoin mining industry today is estimated to be just under 60%, and the Chamber of Digital Commerce has found that the sustainable electricity mix is closer to 80% for its members mining in the state of New York.

“The regulatory environment in New York will not only halt their target – carbon-based fuel proof of work mining – but will also likely discourage new, renewable-based miners from doing business with the state due to the possibility of more regulatory creep,” said John Warren, CEO of institutional-grade bitcoin mining company GEM Mining.

A third of New York’s in-state generation comes from renewables, according to the latest available data from the U.S. Energy Information Administration. New York counts its nuclear power plants toward its 100% carbon free electricity goal, and the state produces more hydroelectric power than any other state east of the Rocky Mountains.

The state also has a chilly climate, which means less energy is needed to cool down the banks of computers used in crypto mining, as well as a lot of abandoned industrial infrastructure that’s ripe for repurposing. 

In a conversation at the Bitcoin 2022 conference in Miami in April, former presidential candidate and New Yorker Andrew Yang told CNBC that when he speaks to folks in the industry, he has found mining operations can help develop demand for a renewable source of energy.

“In my mind, a lot of this stuff is going to end up pushing activity to other places that might not achieve the goal of the policymakers,” said Yang.

Some in the industry aren’t waiting for the state to make a ban…



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