New York’s Misguided Legislation To Stop Bitcoin Mining Won’t Stop The Industry
Legislation under consideration in New York to stop Bitcoin mining over environmental concerns won’t stop an increasingly-green industry.
A bill currently in committee at the New York State Senate is calling for a ban on bitcoin mining for three years while an environmental assessment is conducted to measure greenhouse gas emissions and effects on wildlife of all mining operations in the state.
New York Senate Bill S-6486, introduced by democratic State Senator Kevin Parker and co-sponsored by democratic State Senator Rachel May, is currently under review by the senate’s Environmental Conservation Committee.
One report about the bill called bitcoin miners “bitcoin-hungry profiteers” and noted that “Upstate New York has recently become a hotbed of mining activity, and there could be more mines in the works.”
Foundry Digital, a subsidiary of DCG, has mining operations near Rochester, New York and helps finance other New York-based mining ventures.
“Decentralized infrastructure is the way of the future; bitcoin and bitcoin mining are not going away,” Foundry CEO Mike Colyer recently told Bitcoin Magazine. “The communities, countries and states that understand and grasp the advantages of this infrastructure first will have a long-term competitive advantage. States such as Texas and Kentucky are encouraging the growth of this industry. Given that bitcoin mining is very mobile, miners will move to where there are.”
Factual Inaccuracies With The Bill
Bill S-6486, referred to committee on May 3, 2021, claims to be acting in accordance with New York’s “Climate Leadership and Community Protection Act,” reading:
“A single cryptocurrency transaction uses the same amount of energy that an average American household uses in one month, with an estimated level of global energy usage equivalent to that of the country of Sweden.”
And:
“It is reasonable to believe the associated greenhouse gas emissions will irreparably harm compliance with the Climate Leadership and Community Protection Act in contravention of state law.”
But Magdalena Gronowska, a mining consultant with metamesh.com, told Bitcoin Magazine that these assertions are not based in fact.
“This flawed legislation includes erroneous assumptions regarding energy use and transactions (e.g., it states one bitcoin transaction consumes as much energy as a U.S. household each month),” she said. “While the bill is not surprising, it does a disservice to the mining industry if it’s based on misinformation about how Bitcoin works. The perception that all Bitcoin mining is environmentally ‘bad’ needs to shift.”
We’ll Take It From Here, New York
Francis Suarez, Mayor of Miami, described the bill as “a step in the wrong direction,” saying that “Miami can mine Bitcoin with clean nuclear energy, we want to be the crypto mining capital of the world.”
Meanwhile, more jurisdictions like Kentucky are seeing a growing market for their “stranded” energy and are offering incentives like tax deductions and subsidized energy costs.
“Savvy jurisdictions see that the world is shifting,” noted Gronowska. “Wyoming, Texas, Kentucky and Miami see the potential for economic development and are putting in supportive policy frameworks to attract Bitcoin companies, including miners.”
Bitcoin Miners Will Continue To Operate In New York
Greenidge Power, based in Dresden, New York, which sells power to the grid and also mines bitcoin, recently converted a coal-fired power plant to natural gas to reduce emissions.
According to a recent report, Greenidge Power is planning to expand its facilities, a renovation that has already been approved by the New York government. In addition, Greenidge is exempt from New York’s Climate Leadership and Community Protection Act (CLCPA), which was passed in 2019, because its energy sources are considered to be “behind the meter.”
And it’s clear from other recent developments that bitcoin miners in general are going to move forward with their industry in ways that promote green energy. For instance, Ninepoint recently announced plans to offset the carbon footprint of its bitcoin exchange-traded fund, and Square has released a white paper explaining how bitcoin mining can drive widespread adoption of renewables.
Brad Yassar, a bitcoin miner based in California, has said that he is fully in favor of green mining, but thinks there’s a double standard when it comes to judging which industries are environmentally harmful.
“I think where I may differ in opinion and approach is let’s look at other industries and other activities that are consuming industrial level and scales of electricity and energy and see if we can have a global and across-board approach, as opposed to saying Bitcoin is horrible for humanity and should be destroyed,” he said.
