Topline
Lawmakers in New York passed a bill that bans some types of cryptocurrency mining that rely on carbon-based fuel during an early morning session of the state’s senate on Friday, a move that seeks to address the growing concerns about the environmental impact of energy-intensive blockchain operations including bitcoin mining.
Proof-of-work cryptocurrency mining requires a lot of computing power which makes its extremely … [+]
Key Facts
Members of the New York State Senate voted 36-27 in favor of the bill—previously passed by the state assembly in April—which will now be sent to New York Governor Kathy Hochul.
The legislation targets a specific form of crypto mining that uses the highly energy-intensive “proof-of-work” authentication method—this includes several popular digital currencies including bitcoin.
Proof of work-based mining relies on increasingly complex calculations to verify cryptocurrency transactions, a process that requires a lot of computing power which in turn consumes a lot of energy.
If it is signed into law by Hochul, the legislation will place a two-year ban on new permits being issued or existing permits being renewed to conduct proof-of-work authenticated cryptocurrency mining that relies on electricity generated from carbon-based fuels.
In this two-year period, the state will carry out a study to examine the environmental impact of proof-of-work mining operations along with any potential “social and economic costs and benefits.”
Surprising Fact
Ethereum, the second-largest cryptocurrency in the world by market cap behind bitcoin, currently also uses proof-of-work authentication. However, later this year it plans to switch over to a more energy-efficient authentication method known as proof-of-stake.
This is a developing story.
