A brand-new piece of legislation that created a two-year ban on cryptocurrency mining in the state of New York has been signed into law by Governor Kathy Hochul. The law forbids the issuance of Environmental Conservation Law licences for proof-of-work cryptocurrency mining that relies on electricity derived from carbon-based sources. According to the legislation, mine operators who use clean energy will still be granted permits.
The two main types of cryptocurrencies are proof-of-work and proof-of-stake. Due to the fact that it doesn’t require energy-consuming computer-based mining, the latter is viewed as a cleaner alternative. Bitcoin, the most popular cryptocurrency, employs the proof-of-work algorithm, whereas Ethereum just switched to the proof-of-stake algorithm.
We succeeded! I’d want to express my gratitude to @GovKathyHochul for approving the crypto moratorium. This is a significant victory for the environment and shows that New York is not hesitant to set the standard for national climate policy. I appreciate everyone who joined me in the fight: pic.twitter.com/a2t3LPzB7P
23 November 2022 — Anna R. Kelles (@annakelles)
The new regulation going into effect in New York State strikes a fair balance between stopping local crypto mining and lowering carbon emissions. It’s unknown how much of an effect the law will have, but some miners might leave New York if electricity rates rise too much. Miners travel the world looking for the cheapest electricity prices to make their operations profitable.
For those worried about the environmental impact of mining, the declining price of Bitcoin may force some miners to cease operations because it is no longer economical for them to do so. When a result of less mining activity, network transactions will slow down as this happens. People will raise their transaction fees in an effort to speed up transactions, which will draw additional processing power back into the system.