On November 22, New York Governor Kathy Hochul officially enacted a two-year ban on proof-of-work (PoW) crypto mining, making it the first state in America to do so.
Mining Now Restricted to Green Companies
The PoW mining moratorium will not only forbid new mining operations but will also prevent companies that are already operating in the state from renewing their permits. Any brand-new PoW mining operations in the state will only be permitted to run if they completely rely on renewable energy.
The PoW mining bill was first approved by the state assembly in April of this year, and the State Senate later approved it in June. Due to lobbyist pressure and the state’s ambition to reach its carbon emission goals, Governor Hochul ultimately signed the bill into law.
Upon signing the bill, the governor committed to ensuring that her state continues to be the center of financial innovation while also taking appropriate steps to take care of the environment.
How this Affects Bitcoin Mining
The majority of Bitcoin miners and a few miners of a few other altcoins use the PoW mining consensus. It is thought to be one of the most secure and decentralized methods of verifying a transaction on a blockchain. However, disagreements over the practice’s heavy energy use have tainted it.
With 37.8% of the hash rate of the Bitcoin network coming from the U.S., the United States now has the highest proportion of the global Bitcoin mining hash rate. The two-year ban on PoW mining might be costly and could have a cascading effect, causing other states to take a similar course.
Governor Hochul’s Move Gets Pushback
The move by the state of New York has caused an uproar from groups in the blockchain community. In a tweet, the Chamber of Digital Commerce, an organization that supports blockchain technology, challenged the narrative that Bitcoin PoW mining needed to be banned.
The group claimed that the mining industry’s energy use was not above those of other industries.
The concerns around proof-of-work (PoW) mining are nothing new and have been disproved numerous times; nevertheless, over the past year, there has been a substantial lobbying push, particularly from those who support proof-of-stake (PoS) mining.
Chris Larsen, a co-founder of both Greenpeace and Ripple, has fought for a change in the Bitcoin code. On the other hand, lawmakers have conveniently ignored research studies indicating that a sizeable portion of the energy used for Bitcoin mining originates from renewable sources.
According to research by the Bitcoin Mining Council, the BTC network uses electricity from clean sources for more than 60% of its needs.
Similar PoW restrictions were proposed by European crypto regulators in their Markets in Crypto Assets (MiCA) legal framework. The MiCa Act was passed without a restriction on operations using digital assets based on PoW, as the supporters of such a ban were unable to secure enough support.
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