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A bill that prohibits crypto mining operations that make use of carbon-based fuel to run their facilities has been passed by the New York Senate.
Proof-of-work mining, one of the two most popular decentralized consensus mechanisms, that are used to confirm new transactions on the blockchain and mint new tokens; however, a lot of energy goes into validating blockchain transactions.
A popular decentralized consensus mechanism, Proof of work (PoW), requires members of a network to put in the effort to tackle an arbitrary mathematical puzzle to prevent anyone from destroying the system. Bitcoin, Ethereum, and Dogecoin are some of the most popular proof-of-work tokens.
Proof-of-stake helps in choosing which participants should be given the task of verifying transactions. The selected ones are rewarded with new crypto if they validate the new data accurately.
Using proof-of-stake, a proof-of-work alternative, crypto-assets such as ETH2.0 or Avalanche basically achieve the same thing in less energy. In addition, this consensus mechanism is also quite more efficient for scaling than proof-of-work.
The purpose of the bill is to reduce the carbon footprint of the state and mitigate the future and current effects of climate change.
The bill also mentioned that the cryptocurrency mining operations that use proof-of-work mechanisms for validating blockchain transactions are a growing industry in the State of New York.
Furthermore, it stated that the constant expansion of operations would significantly lead to the rise in the amount of energy usage” in the state.
All Proof of work mining activities that are in the state that depend on burning fossil fuels will suffer a two-year ban. But, mining businesses with 100% renewable energy proof-of-work will still be allowed to operate.
Steven McClurg, CIO, and co-founder of Valkyrie Investments, which supervises the largest U.S.-based Bitcoin miners ETF, WGMI, said that eventually, the bill would be more destructive for New York, as these miners will gather in states such as Tennessee, Washington State, Texas and elsewhere that offer wind, solar, hydro along with other sources of clean energy.
In April, after passing it through the New York State Assembly, the senate voted 36-27 in favor of the bill. It has now reached Kathy Hochul, New York Governor, who coils sign or veto the legislation.
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Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
