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Carbon reduction policy? New York mining ban awaiting governor's approval, aiming to reduce total PoW carbon emissions

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Carbon reduction policy? New York mining ban awaiting governor

The New York State Senate has passed a ban on PoW mining, and Governor Kathy Hochul will decide on the final outcome of the bill. The article summarizes comments from various sectors and the governor's previous views on the cryptocurrency field. Overall, if the main focus of the bill is on "environmental impact," the policy direction should compel miners to transition to clean energy sources. Simply banning PoW mining outright will not reduce the total carbon emissions from PoW mining in the slightest.

PoW Mining Ban

In late April this year, the U.S. Energy Commission attempted to advance the A.7389C / S.6486D bill, proposing a three-year suspension of permits for mining facilities using fossil fuel power plants. Mining facilities would be required to operate with 100% green energy and submit a complete environmental impact assessment report.

Note: The two bills were introduced on 5/6 and 5/3 of last year, during the tenure of former and current governors Andrew Cuomo and Kathy Hochul, respectively.

  • On 4/27, the New York State Assembly passed a two-year PoW mining ban with a vote of 95:52, which is now under review by the Senate committee.
  • On 6/2, the Senate passed the bill, with the dynamic indicating that A.7389C will replace S.6486D and become the primary bill.
  • New York Governor Kathy Hochul will sign or veto the bill within ten days.

According to data from the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge, the U.S. accounted for 37.84% of the total hash rate by the end of last year. While Texas is a more prominent mining hub with a share of 11.2%, New York's share of the U.S. hash rate has also reached 9.8%.

U.S. Hash Rate Distribution

Governor's Stance?

In the 2022 State of the State address in New York, Governor Kathy Hochul mentioned in the "Combatting Cryptocurrency Crime" section plans to acquire blockchain analysis software to help law enforcement prevent criminals from using cryptocurrency to traffic firearms.

During an interview with The New York Times on 5/30, she mentioned that while cryptocurrency mining can create many job opportunities in New York, a balance must be struck between environmental protection and energy consumption.

The New York Times also revealed that Hochul has received $40,000 from mining company Coinmint founder Ashton Soniat and $78,000 in donations from lobbying firm Ostroff Associates.

The lobbying firm's clients include Blockfusion, a mining company where an explosion occurred at a mine in Niagara Falls, New York.

Community Reactions

1. Government Interference in Software Operation

Aside from cryptocurrency stakeholders lobbying with money, Ethereum co-founder Vitalik Buterin's argument gained attention. He retweeted a post from Bitcoin supporter Bruce Fenton, who stated:

No government has the right to prohibit people from running specific software.

Vitalik retweeted saying:

Agree with Bruce Fenton's point, and oppose the ban on PoW. It's a bad idea for the government to filter specific applications that can use electricity. Implementing carbon pricing would be better, subsidizing low-income users with additional revenue. Of course, in the absence of perfect, objective compensation measures, we still have a moral responsibility.

Coin Metrics co-founder Nic Carter also criticized the ban from a different perspective:

New York is regulating data content by banning a data computation behavior, the secure hash algorithm 256.

2. Employment and Innovation Development

The employment aspect is a point that lobbyists and industry insiders most agree on. John Buhl, media relations manager at the Tax Foundation, stated that implementing energy restrictions on specific industries may achieve short-term goals but will soon turn into a game of whack-a-mole. Cryptocurrency mining will not be the last case New York lawmakers need to address.

3. Real Carbon Reduction or Political Posturing?

Former Compound legal counsel and Blockchain Association policy director Jake Chervinsky urged everyone to remember that the mining ban will not reduce any carbon emissions and will only push miners to other states in the U.S., purely serving as self-gratifying political theater for legislators.

He emphasized that while the ban may be a moral victory for some, it is disconnected from reality and more likely to force miners to relocate to areas with lower environmental regulatory thresholds, leading to more negative environmental impacts.