New York State signs the Cryptocurrency Mining Restrictions Act, setting a “dangerous precedent” for cryptocurrency advocates.
The mining companies of cryptocurrencies those hoping to be operational in New York State will certainly have to revise their plans. Governor Kathy Hochul signed into law the law restricting cryptocurrency mining in the country, making him the first state in the country to end the practice.
New York State Signs Cryptocurrency Mining Restrictions Act
This environmental protection-focused law establishes a two-year freeze on new permits and renewals for mining farms that use fossil fuels and operate “proof of work.” the Department of Environmental Conservation it will also need to study whether and how cryptocurrency mining impacts government climate change efforts.
The bill passed last June but only recently hit Kathy Hochul’s desk. And it wasn’t guaranteed to become law. The hill reports that the Governor did not commit to signing the measure during the October election debate. His main opponent, Lee Zeldin, said he probably wouldn’t have signed her if he was able to.
A “dangerous precedent” for cryptocurrency supporters
Politicians and various environmental groups are concerned about cryptocurrency mining, especially mining that involves the “proof-of-work” mechanism, which consumes too much energy. The calculation process adds a huge load to the electricity grid, some specialized companies have even installed natural gas-fired power plants to run their operations. The cryptocurrency world has tried, at times, to downplay its impact. Ethereum, for example, recently made a big change by switching to proof of stake, which requires much less energy.
It is difficult to know if other states will follow. Democratic senators have lobbied Texas to act on energy demands for cryptocurrency mining, but the state government has yet to make a decision. Unsurprisingly, crypto advocates have also backed down from laws restricting their activity. The Digital Chamber of Commerce stating that the New York law sets a “dangerous precedent” and that proof-of-work mining plays an important role in economic growth. There is also the question of the effectiveness of this measure: this law could lead some minors to less restrictive states.
