New York State Bans Some Cryptocurrency Mining

The state of New York has banned a part of cryptocurrency mining, the creation of virtual currencies deemed too energy-hungry, for two years. This is the first state in the US to stop this activity in whole or in part. Democratic Gov. Kathy Hochul on Tuesday, Nov. 22, released text voted on in the spring by the state Legislature that provides for a moratorium on fossil fuel-consuming mining activities.

Several specialty companies have taken over old power plants in New York State in recent years to supply mining operations. According to data from the specialist firm Digiconomist, mining or creating Bitcoin, the world’s most popular cryptocurrency, requires about 1,150 kilowatt hours, or the average consumption of an American household for 40 days.

China banned it

The ban, which took effect on Tuesday, concerns the so-called “proof-of-work” mining method, which is considered the most energy-intensive and currently the most widely used. It consists of having the computer perform a series of complex calculations as quickly as possible in order to be declared the winner and awarded one or more points of cryptocurrency. This process is increasingly being replaced by a so-called “proof-of-stake” protocol, which requires no computation and therefore requires much less electricity.

This moratorium is to give New York State time to conduct an environmental impact assessment of mining activities in its territory. Several countries have already banned cryptocurrency mining, including China. It was essentially the world leader in the creation of virtual currencies until June 2021, the date of suspension. China’s ban on mining led to an exodus that greatly benefited the United States, which is self-sufficient in energy and has since become the world’s largest producer of cryptocurrencies. In Europe, Kosovo also banned mining in January 2022, when the country was experiencing energy supply problems, resulting in repeated blackouts.