New York governor Kathy Hochul signed The proof-of-work (PoW), mining moratorium was passed on Nov. 22. This made it the first American state to ban PoW crypto mining activities for two years.
The PoW Mining Moratorium will prohibit new mining operations, and it will also prevent renewals of licenses for existing mining operations. A new PoW mining operation could not be established in the state unless it used 100% renewable energy.
The PoW mining bill was passed first by the state assembly in April this year. It then received the approval of the State Senate in May. Governor Huchkul signed the bill into law to comply with carbon emission targets and lobbyist pressure. Huchkul wrote the following:
“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,”
Bitcoin (BTC), and a few altcoin miners use PoW mining consensus. It is considered to be one of most reliable and decentralized ways to authenticate a transaction on a Blockchain. The practice is fraught with controversy due to its high energy consumption.
With 37.8% of the Bitcoin network hashrate coming from the United States, the United States is currently at the top of Bitcoin mining rate share. The two-year PoW moratorium could prove costly and create a domino effect that will encourage other states to follow in the same footsteps.
Chamber of Digital Commerce, an advocacy group for blockchain called out A false narrative in a Tweet:
“The state’s argument the mining industry’s energy use is exponentially beyond other industries is blatantly false. The Climate Leadership and Community Protection Act requires NY greenhouse gas emissions be reduced by 85% and achieve net zero emissions in all sectors by 2050.”
While the PoW mining FUD was not new and has been disproved many times, there has been considerable lobbying over the past year, particularly from those who support proof-of-stake mining (PoS). Chris Larsen, cofounder of Ripple and Greenpeace has been advocating for a change to the Bitcoin code.
However, lawmakers have conveniently overlooked research reports showing that a substantial portion of Bitcoin mining electricity comes from renewable sources. The Bitcoin mining council report revealed that over 60% of electricity consumed by the BTC network is from renewable sources.
European crypto regulators had previously proposed a similar PoW banning in their Markets in Crypto Assets legislative. Proponents of banning operations using PoW-based digital assets were unable to get enough support. MiCa legislation was therefore passed without such a ban.