The New York Senate has passed a bill banning cryptocurrency mining operations from using carbon-based fuels to power their facilities.
The bill specifically targets proof-of-work mining, which is one of the two most common mechanisms used by cryptocurrencies to verify new transactions on the blockchain and generate tokens. new, but it uses a lot of energy to validate blockchain transactions.
Some of the most popular proof-of-work tokens include Bitcoin, Ethereum, and Dogecoin.
The alternative, proof-of-stake, is when cryptocurrencies – like ETH2.0 or Avalanche – use staking to achieve the same with less energy and it is said to be more efficient to scale as proof of work.
The bill is an effort by lawmakers to thwart the state’s carbon footprint and “mitigate the current and future impacts of climate change,” according to the bill.
“Cryptocurrency mining that runs proof-of-work authentication methods to validate blockchain transactions is a growing industry in New York State,” he said. The continued expansion of operations “will significantly increase the amount of energy used” in the state, he added.
If passed, all proof-of-work mining operations in the state that depend on burning fossil fuels would face a two-year ban. However, 100% renewable energy mining companies will still be allowed to operate.
“Ultimately, this measure will do more harm to New York than it will help, as these miners will increasingly congregate in states like Texas, Tennessee, Washington, and other places that provide energy solar, wind, hydro and other energy sources,” said Steven McClurg, co-founder and CIO of Valkyrie Investments, which oversees WGMI, the largest US-based Bitcoin mining ETF. The Senate voted 36 to 27 in favor of the bill after it was passed by the New York State Assembly in April. He can now go to the office of New York Governor Katie Hookul to sign or reject the bill.