Bill Banning Cryptocurrency Mining Advances In New York State Assembly – Technology

On March 22, 2022, the New York State Assembly’s
Environmental Conservation Committee voted to advance legislation
that would impose a two-year moratorium on cryptocurrency proof of
work (“PoW“) mining where energy is
derived from fossil fuels.  This proposed legislation is in connection
with New York’s Climate Leadership and Community Protection
Act, which mandates that New York’s greenhouse gas emissions be
cut by 85% by 2050 and zero net emissions.  The bill would
have to pass the New York State Assembly, the New York Senate, and
be signed by the governor.  Earlier in March 2022, the
European Union Parliament’s Economic and Monetary Affairs
Committee voted against a similar ban on PoW mining.

At a high level, the proposed legislation would ban PoW mining,
which is the energy-intensive process used to secure the Bitcoin
network, for two years.  During that time, the New York
Department of Environmental Conservation would conduct an
environmental impact statement analyzing the below issues, among
others:

• The number and locations of existing PoW mining
  operations;




• The amount of electricity consumed by each location, and
  sources of energy and type of fuel used;




• The amount of greenhouse gas emissions attributable to the
  mining operations;




• The impact of continued mining on New York’s environmental
  goals;




• The amount of water usage, water quality, and air quality;
  and




• The social and economic costs and benefits of allowing mining
  to continue.

Opponents of the bill argue that cryptocurrency mining
constitutes a small percentage of New York’s overall energy
usage, and the industry is being unfairly singled out and
scapegoated.  In addition, according to opponents, a ban on
cryptocurrency mining would signal to the world that New York is
closed for business in an important and developing technological
industry. 

Recent attention on the energy consumption in connection with
PoW mining is timely given Ethereum’s pending merge from PoW to
proof of stake (which uses a fraction of the energy involved in
PoW), which is set to occur in the summer of 2022.

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