New York Gov. Kathy Hochul has signed legislation imposing restrictions on cryptocurrency mining in the region: a two-year ban on digital asset mining will be imposed if it is conducted using devices powered by non-clean energy sources .
The document introduces a moratorium on issuing and renewing permits for the production of cryptocurrencies when the mining equipment is powered by a fossil-fuel power plant and the corresponding blockchain is based on the proof-of-work algorithm. This algorithm underlies the Bitcoin network, for example – it offers transaction protection, but is extremely energy-intensive. By abandoning this model, the Ethereum blockchain reduced energy consumption by more than 99%. The New York state legislature passed this law back in June, and the governor has opposed it.
The law also directs the Department of Environmental Protection to assess the impact of cryptocurrency mining on the state’s ability to meet climate targets. Ecologists strongly doubt this: according to their version, this is prevented by mining companies that operate their own power plants that run on natural gas. Cryptocurrency advocates believe the new law will become a stumbling block to New York State’s economic development — it targets cryptocurrencies while other industries continue to use fossil fuels.