On April 26, 2022, the New York State Assembly sanctioned a two-year-long ‘moratorium’ on Bitcoin mining activities powered by fossil fuels. The bill will move to the State Senate and eventually become law if and when the governor signs it.
In parallel, Congress member Jared Huffman, who belongs to the Select Committee on Climate Crisis, also wrote a letter to the Administrator of the Environmental Protection Agency. The letter cites all the concerns surrounding the disastrous environmental impact of Bitcoin mining and requests the EPA to assess the situation.
“Of particular concern is the inherently energy-inefficient 'Proof-of-Work' (PoW) mining technology to validate transactions. PoW-based cryptocurrencies include Bitcoin, Ethereum, Monero, and Zcash. A single Bitcoin transaction could power the average U.S. household for a month. According to estimates by researchers, Bitcoin produces annually carbon emissions comparable to Greece,” Hoffman’s letter read.
According to the state’s Climate Leadership and Community Protection Act, New York has to slash its emissions by 85 percent by 2050. Therefore, the bill to ban Bitcoin mining could help in realising this goal. However, with Bitcoin being the most-mined cryptocurrency in New York, experts believe that the repercussions of this becoming a law could severely impact the crypto industry.
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USA is now the “mining capital of the world,” according to GEM Mining CEO John Warren. This is why businesses have been opposing the bill. They are even appealing to the governor to step in and stop the bill from becoming a law. Moreover, if New York passes the moratorium bill as a law, other states could take cues from this aggressive stance and follow suit.
The present Governor Kathy Hochul, assumed office when the previous governor resigned last year and is due for re-election this year. When Politico tried to contact Hochul’s office in January 2022, it was met with the response that the governor was “actively reviewing proposals regarding the role of cryptocurrency mining in New York’s energy landscape.” She will likely sign the law into effect soon, considering the electoral landscape.
On the flip side, Fort Worth in Texas has become the first city in the USA to mine its own Bitcoin. A mining farm has already been set up in City Hall. It consists of three Bitmain Antminer S9 mining rigs that will run continuously on all seven days of the week.
As per the city’s calculations, each of the three operational rigs will consume the power equivalent of a household vacuum cleaner. While the profit share will be low, the cost of running the farm will be covered by the mined Bitcoin itself.
According to Mayor Mattie Parker, the project has started small because of the massive power consumption involved. Parker is the first millennial mayor of Fort Worth and believes that adding Bitcoin to the city’s balance sheet will only strengthen it. The city will check back in 6 months and decide whether to expand the operation or shut it down altogether.
“For Fort Worth, a lot of people don’t know who we are. We want to change that conversation, and we believe that tech innovation, including cryptocurrency, is the way we’re going to do that,” Mayor Mattie Parker said to CNBC.
Bitcoin mining has been at the centre of criticism when it comes to environmental impact. Bitcoin’s Proof-of-Work (PoW) mining operations require computers across the globe to compete with each other and solve complex mathematical equations to verify encrypted transactions. This process consumes surreal amounts of energy and is therefore under severe scrutiny.
According to the Bitcoin Energy Consumption Index by Digiconomist, the approximate annual energy consumption of Bitcoin currently stands at 204.5 terawatt-hours (TWh). This is comparable to the yearly power consumption of the entire country of Thailand.
Observer reports that no significant strides have been made in making Bitcoin mining an environmentally friendly operation. Most nations are now cognizant of the severity of climate change and are gunning for a reduced carbon footprint across all industries. China was the first to ban Bitcoin mining in 2021, citing environmental concerns. And if Bitcoin mining continues, it will be in direct conflict with several national goals.
Nonetheless, the E.U. Parliamentary Committee recently voted to keep out any ban on Bitcoin mining from its legislation – a vote that survived narrowly. Encouraging innovation and future outlook-based regulation were cited as the primary reasons for the same.
