New York State Restricts Cryptocurrency Mining

New York became the first US state to restrict the production of cryptocurrencies (mining). According to The New York Times, State Governor Kathy Hokul signed a bill that imposes a two-year moratorium on the issuance of new licenses, as well as the renewal and expansion of existing licenses for mining companies to use the premises of local fossil-powered power plants. The use of renewable energy sources for mining in New York is still not prohibited.

The moratorium only applies to mining based on the proof-of-work algorithm, which requires large computing power, which leads to an increase in carbon emissions into the atmosphere. It, in particular, runs Bitcoin, the most popular cryptocurrency payment system in the world. More modern cryptocurrency projects, including the second most popular Ethereum in the world, work on the proof-of-stake algorithm (proof of weight), where not computing power is important, but the financial capabilities of network participants. Therefore, this principle of operation is much more environmentally friendly.

The New York Mining Act aims to freeze and then reduce the amount of harmful emissions into the atmosphere from mining operations conducted in the state. At the same time, as part of the initiative, the authorities undertook to study the degree of influence of mining on the total amount of CO2 emissions in New York.

Kirill Sarkhanyants