New York halts Bitcoin mining for 2 years, ‘grim day’ for Blockchain

New York, June 3 (IANS): In bad news for Bitcoin and Blockchain lovers, the New York State on Friday passed a bill to halt new permits for certain fossil fuel power plants to be used in Bitcoin mining.

The measure establishes a two-year moratorium on new permits for cryptocurrency mining operations that use proof-of-work (PoW) authentication methods to validate Blockchain transactions.

The measure also initiates a study on the environmental impact mining facilities are having in New York state.

The Senate voted 36-27 in favour of the new bill.

It now goes to the desk of Governor Kathy Hochul, who could sign it into law or veto it, reports The Verge.

Hochul reportedly received a $40,000 donation last month from a chief executive of a company that runs a former aluminium plant turned crypto-mining facility.

The bill was passed by the NY state Assembly last month.

It would impose a moratorium on any new PoW mining projects powered by carbon-based fuel in the state.

However, existing crypto mining operations undergoing the permit renewal process would be allowed to continue.

According to Coindesk, mining companies based in New York have threatened to leave the state if the moratorium is passed.

The bill “is a grim day for blockchain technology, effectively shutting the door on a nascent industry,” said Clark Vaccaro, acting president and chief strategy officer at industry trade organisation BaSIC.

“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,” John Warren, CEO of institutional-grade bitcoin mining company, GEM Mining, told CNBC.

Bitcoin (BTC) mining is a very electricity-intensive process. A recent study has shown that a single Bitcoin transaction consumes about 2165 kWh of electricity which a regular household in the US would use in 74 days.

One of Botcoin’s core features, its proof-of-work (PoW) consensus mechanism, is every miner’s headache. PoW requires them to solve complex equations for a share of newly-mined coins.

PoW has also come under criticism for its environmental footprint and critics hold that it is a wasteful and unsustainable crypto for the universe.

Studies have shown its carbon emissions to match those of entire nations.

One of the studies estimates that Bitcoin emits nearly 114 megatonnes of CO2 annually, a value comparable to Czech Republic’s.