Lawmakers in New York passed a bill on Friday that bans new Bitcoin mines that use fossil fuels for a period of two years due to environmental concerns regarding the massive amount of electricity the industry uses.
Proof-of-Work cryptocurrency mining is what secures the Bitcoin network (and other cryptocurrencies, like Ethereum), with mining firms using up a ton of energy to power specialized computers 24/7 to validate blocks of transaction data. Much of that energy comes from renewable sources, but also from fossil fuels. New York has become a hotbed for mining activity, which critics have said threatens to undermine the state's climate objectives.
The bill, which is now headed to Governor Kathy Hochul to be signed into law or vetoed, seeks to address this by cracking down on mines that use fossil fuel sources. If passed, then for two years the state will not approve permits for new mines, and it will not allow existing mines to renew or expand their permits. In the meantime, the government will prepare a report on the industry's climate impacts and open the topic to a public discussion for a period of 120 days.
If made into law, it would represent the first time that a U.S. state has placed a ban on cryptocurrency mining. New York is no stranger to these debates and similar bans, however, with the city of Plattsburgh putting a temporary ban on new mines in 2018 due to concerns with rising energy prices.
The question of Bitcoin's energy use has become a topic of heated debate after a crackdown in China sent mining firms packing, many of which ended up in the U.S. Texas has become a top destination for mining firms, for example, with Republican Senator Ted Cruz positioning himself as an ally of the emerging industry.
With the New York bill moving towards becoming law, it's unlikely that the controversy will cool off.