New York State Assemblymember Anna Kelles is tired of all the fear-mongering about the bill she wrote — and sponsored — to place a two-year moratorium on certain types of new cryptocurrency mines in the state.
Within that subcategory of mines, the measure only applies to those looking to expand or renew permits, while new entrants would not be allowed to come online.
Proof-of-work mining, which requires sophisticated gear and a whole lot of electricity, is virtually synonymous with bitcoin.
Kelles says that her bill is essentially just a big pause button, designed to halt the actions of a corner of the state’s crypto mining industry running on coal- and natural gas-based power plants.
Miners make large capital investments that can require up to five years to provide a payback, plus return on investment.
Miners at scale compete in a low-margin industry where their only variable cost is typically energy, so they are incentivized to migrate to the world’s cheapest sources of power – which also tend to be renewable.
“The oldest and largest cryptocurrency mining operation in the country is in New York State, and it is fully on hydroelectric.
In addition, the state has a chilly climate, which means less energy is needed to cool down the banks of computers used in crypto mining.
However, some data suggests miners began leaving New York for friendlier political jurisdictions like Wyoming and Texas last year, ahead of the anticipated crackdown.
Some of the biggest names in bitcoin — including Jack Dorsey, Tom Lee, Nic Carter, and Michael Saylor — recently co-signed a letter to the Environmental Protection Agency in which they took issue with congressional Democrats conflating data centers with power generation facilities.
The rebuttal letter said data centers that contain “miners″ are no different than data centers owned and operated by Amazon, Apple, Google, Meta, and Microsoft.
Kelles says the key here is to make sure the state isn’t making emotionally or politically based decisions.
“Our scientific experts and environmental experts will be collecting data about the industry’s impact on our ability to reach our CLCPA goals,” she said, referring to the Climate Leadership and Community Protection Act.
Bitcoin miners have also improved the economics of renewables.