New York State Bans Some Cryptocurrency ‘Mining’

New York State Bans Some Cryptocurrency 'Mining'

The state of New York has banned for two years the creation of virtual currencies that are considered greedy in energy, as part of the “mining” activities of cryptocurrencies. It is the first US state to suspend all parts of these operations. Democratic Gov. Kathy Hochul announced Tuesday, Nov. 22, a provision voted by the state legislature in the spring that would put a moratorium on mining operations that use fossil fuels.

A number of private companies have taken over old power plants in New York State to supply mining operations. According to the specialized firm Digieconomist, mining or creating a BitcoinThe world’s most popular cryptocurrency requires about 1,150 kilowatt hours, which is the average consumption of an American household for 40 days.

China banned it

The ban, which took effect on Tuesday, concerns the most energy-intensive and currently most widely used mining method, called “proof of work.” It involves a computer performing a series of complex calculations as quickly as possible to declare a winner and award one or more units of cryptocurrency. This process is increasingly being replaced by a protocol called “proof of stake”, which requires no computation and therefore requires very little electricity.

This moratorium should allow New York State time to conduct an environmental impact assessment of mining operations in its territory. Several countries, including China, have already banned cryptocurrency mining. It was the world leader in creating virtual currencies until the suspension date of June 2021. The outlawing of mining in China 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 after the country experienced energy supply problems and repeated power cuts.

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