Bitcoin Mining Moratorium Passes Vote in New York State Assembly

In a 95-52 win, the New York State Assembly has voted to pass an act that would place a two-year moratorium on Bitcoin mining. 

The bill will now go to the State Senate for another round of voting. 

“Thrilled that my bill with Senate champion [Kevin Parker] A7389C/S6486D just passed in the Assembly as part of the #EarthDay Package!” tweeted Assemblymember Anna Kelles, one of the bill’s architects.

Decrypt has contacted Assemblymember Kelles for further comment on the passing of this bill.

Though the bill does not propose an outright ban on crypto mining, it would halt mining firms from renewing operating permits if those operations are fossil-fueled. According to the bill, this also means that new permits will not be approved either.

“The Department of Public Service shall not approve a new application for or issue a new permit (...) for an electric generating facility that utilizes a carbon-based fuel and that provides, in whole or in part, behind-the-meter electric energy consumed or utilized by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions,” it reads. 

“Behind-the-meter” is a term to describe energy used on-site and is in contrast to “front-of-meter,” which powers an off-site location. “Proof-of-work authentication methods” refers to the mechanism a blockchain uses to confirm various operations from simple transactions to minting an NFT. 

Currently, Bitcoin and Ethereum are the largest proof-of-work (PoW) networks in crypto. Ethereum is, however, expected to change to a more eco-friendly mechanism called proof-of-stake (PoS) in Q3 this year, with the much-anticipated Ethereum 2.0 upgrade. 

The also bill indicates that the Department of Environmental Conservation will prepare an assessment on the environmental impact of “mining operations that use proof-of-work authentication methods to validate blockchain transactions.”

This assessment would include the number of operations in the state, each operation’s energy consumption, the source of that energy consumed, the operation’s gas emissions, the impact of the sector on electric energy consumption, water usage, as well as the effects on public health and economic impacts. 

Once drafted, the assessment will be made available for public comment for 120 days.

Before any of this can begin, the bill must now pass in New York’s State Assembly. The bill will then be delivered to Governor Kathy Hochul to be signed or vetoed if passed.

Bitcoin mining and the environment

Much of the impetus around this bill revolves around concerns that Bitcoin mining is harmful to the environment. 

Current data from Cambridge University’s Centre for Alternative Energy estimates that the Bitcoin network currently uses 150.66 Terawatt-hours of energy to validate transactions per year. This is more than the energy countries like Poland, Argentina, and Belgium use. 

These concerns are especially relevant to New Yorkers as the state has set firm climate goals and is also home to a reported 19.9% of Bitcoin’s hashrate in the United States. It is unclear how much of this New York-based hashrate is carbon-fueled and would be affected by the tenets of the latest bill.

The climate goals laid out in July 2019 include net-zero carbon emissions by 2050 and 100% carbon-free electricity by 2040.