New York Sign the Proof-of-Work Mining Moratorium into Law
- New York is the first US state to issue a 2-year ban on Proof-of-Work mining.
- Crypto groups worry that the ban will hinder the growth of the industry in New York.
New York became the first US state to announce a temporary ban on proof-of-work mining activities after the state’s governor, Kathy Hochul, signed the proof-of-work (PoW) mining moratorium into law. Crypto mining has been heavily criticized for its energy-intensive nature and environmental impact. So, the bill comes as a solution to its climate impact.
The proof-of-work mining moratorium will not only ban new mining operations but will also prevent companies that are already operating in the state from renewing their permits. Companies engaged in PoW mining in New York will only be permitted to operate if they completely rely on renewable energy.
A memo for the bill said,
The law will prohibit Environmental Conservation Law permits from being issued for two years to proof-of-work cryptocurrency mining operations that are operated through electric generating facilities that use a carbon-based fuel.
Although crypto activities are popular in New York, the state assembly shocked the community when it passed the PoW mining bill in April and received the support of the State Senate in June. Sources claim that Governor Huchkul signed the bill as a result of lobbying pressure to reach its carbon emission goals.
Governor Huchkul assured her followers, saying,
I will ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of our environment.
Assemblywoman, Anna R. Kelles believes the passage of the bill is “a huge win for our planet and a sign that New York is not afraid to lead the nation in our climate policy.”
The PoW mining consensus is used by Bitcoin miners and some altcoins. Additionally, crypto experts believe the PoW mechanism is one of the most secure and decentralized methods of verifying a transaction on a blockchain. However, disagreements over PoW’s heavy energy use have tainted it.
With the U.S. accounting for 37.8% of the hash rate of the Bitcoin network, the United States now has the highest proportion of the global Bitcoin mining hash rate. The two-year ban on PoW mining may be unpleasant, and it may even spur other states to take the same course.
The ban on proof-of-work mining in New York has faced harsh criticism from the cryptocurrency community. Business associations in the state worry that the bill will slow the expansion of the crypto sector in the Empire State.
Perianne Boring, CEO of the Chamber of Digital Commerce, slammed Hochul for enacting the ban, claiming that no other industry in the state has been sidelined for its energy usage. However, Governor Hochul remains convinced that the move was a good one. She said,
I am signing this legislation into law to build on New York’s nation-leading Climate Leadership and Community Protection Act, the most aggressive climate and clean energy law in the nation, while also continuing our steadfast efforts to support economic development and job creation in upstate New York.
Authorities in Europe also considered a similar ban on PoW mining, but such a ban failed to make its way into the MiCa legislation.