Cryptocurrency mining often requires massive amounts of electricity, especially for proof-of-work chains like Bitcoin. That power sometimes comes from fossil fuels, which New York state wants to limit.
New York Governor Kathy Hochul signed into law a bill Tuesday that aims to limit the use of environmentally damaging fossil fuels for cryptocurrency mining. She places a two-year moratorium on new and renewed air permits for fossil fuel power plants used for energy-intensive cryptocurrency mining. The law also directs the New York Department of Environmental Conservation to assess how cryptocurrency mining affects the state’s climate goals.
Governor Hochul said in a statement: “I will ensure that New York continues to be the center of financial innovation, while taking important steps to prioritize protecting our environment.”
The environmental impact is a common criticism of cryptocurrencies, as many blockchains are based on proof-of-work, which uses significant amounts of energy to verify each transaction compared to regular banks and digital payments. Newer blockchains use a more efficient proof-of-stake model, but not Bitcoin and some other chains. The Ethereum blockchain migrated to proof-of-stake earlier this year.
The extensive use of fossil fuels is one of the most important problems of cryptocurrencies. Many other industries are heavily dependent on fossil fuels, but in the end, you usually get something useful, like a car or a computer. Pumping toxic fumes into the air for Bitcoin mining only gives you money that isn’t very good for money.
Source: Associated Press