New York state may well become the first to ban blockchain technology infrastructure in the US if a new bill, cited as Assembly Bill A7389C, finds full approval. Passed via an early morning vote on Friday, June 3rd, the bill attempts to entirely ban bitcoin mining operations that utilize harmful carbon-based energy sources. However, before it can be accepted into law, Governor Kathy Hochul must first decide on whether to sign it or veto the bill entirely.
First passed in late April through the State Assembly, then heading to the State Senate, New York's cryptocurrency mining bill intends to cease specific operations in the field "that use proof-of-work authentication methods to validate blockchain transactions." As opposed to what is called "proof-of-stake," proof of work is based more so on competitive mining operations, which require incredibly intensive forms of energy consumption, as well as a specific kind of bitcoin mining rig.
The passing of the measure would no doubt cause a domino effect within the US, creating more incentive for alternative states to pick up the bill as a way to curb the ever-growing carbon footprint in the US. For New York-based lawmakers, this is the very point behind the bitcoin mining ban, taking cues from China, as the country similarly cracks down on major carbon-intensive crypto mining sites.
Such crypto mining farms utilize insane amounts of electricity taken from fossil fuel-burning power plants, which in turn only adds to the problem inherent in bitcoin mining and the environment. But, New York state has no sooner become a hotbed for crypto mining sites and crypto mining companies, given the previously existing limited rulesets applied to the activity and the many empty plants and cheap energy available.
Even New York City Mayor, Eric Adams, is a major believer in the digital asset, taking his first paycheck in bitcoin, and has consistently laid plans to make New York a literal "crypto empire," ideals of which now seem rather difficult per a potential bitcoin mining ban. Beyond Adams' own roadmap, the measure would also cause major stopgaps in the state's economy, as both many various businesses and jobs would need to relocate if the bill finds approval.
With its passing, Assembly Bill A7389C would essentially disallow any proof-of-work mining companies from expanding their operations and renewing their permits, as well as making any behind-closed-doors crypto mining sites that require such energy consumption illegal for the next two years. However, if any company does find a way to make proof-of-work mining operations work on 100% renewable energy, it would actually be null and void under the bill (and a potential gold mine in the industry).
Ethereum has stated it will begin utilizing far less energy-intensive parameters for its crypto mining operations but will still require proof-of-work for at least another several months. Additionally, the US is among the most prominent countries serving the industry, holding around 38% of the world's crypto mining sites. If passed, the bill could potentially put New York in the same shoes as China, wherein bitcoin mining has only risen despite the measures attempting to curtail it.
Beyond New York's measure, on the whole, the US has been targeting the cryptocurrency industry due to its volatile nature in financial services, as well as the environmental concerns surrounding its mining. The Biden Administration has called for the passing of a similar measure that would address energy consumption utilized in crypto mining sites, which stems from a previous executive order signed by the President in March that attempts to regulate the crypto market somewhat.
While the broader form of US government is still dragging its heels on the occasion of bitcoin mining, with a more substantial outlook slated by September, individual states themselves are clearly taking a more thorough look into the avenues possible in curtailing their own carbon footprints wrought by proof-of-work.
