Why has a senator from New York decided to prohibit cryptomining for 3 years?
Crypto-mining facilities in New York may shut down their operation for at least three years if the proposed bill will be approved by the Senate. Bitcoin mining is notorious for the excessive power use. Reports argue that the monthly energy consumption of the large mining poolos in china are equal to the yearly energy consumption of Argentina. Although, the New York pools may not account for the large portion of the overall Bitcoins being mined, the local environmental organizations are concerned about the damage that mining brings to the region.
Read on to find out what is this bill about, and what are the perspectives of it passing the Senate and becoming a law.
The Bill 6486
The Bill 6486 of the New York Senate was introduced by Democrat senator Kevin S. Parker. The purpose of this bill is to shut down the cryptocurrency mining pools in order to prevent the harmful impact of their operation on the environment. These mining centers work burn fossil fuels to continue working, which is said to increase the greenhouse effect.
The bill also proposed more severe regulations for the mining farms. For example, if the bill passes, enterprises like these will have to undergo regular environmental impact checks. If the results of such review won’t meet the New York targets for the environmental impact, the operation of the mining center will be suspended as well. The targets set in 2019 with the Climate Leadership Act aim to use 70% of renewable energy by 2030, all zero-emission electricity by 2040, along with the reduction of carbon emissions by 22 million tons.
As you can see from the Bitcoin mining map, New York region represents a larger circle, almost close to Chinese one, which is responsible for higher monthly hash rates. The New York Bitcoin plant on Seneca Lake uses gas energy to maintain its operation. The enterprise recently revealed their plans for adding up to 27,000 more processing units to mine Bitcoin around the clock. At the same time, the local environmental protection group voiced their complaints and called Bitcoin “fake money”, and regarded its production as “insane”.
Elon Musk supports energy-efficiency targets
It’s worth noting that not only mining but also Bitcoin transactions take up large amounts of energy. If you were to exchange bitcoin to dollars, this would also require making another write-up in the blockchain ledger, and the process of approving the transaction would consume some energy. Perhaps, that’s the reason why Elon Musk recently announced that Tesla stopped accepting Bitcoin as payment for their electric cars.
Since Tesla advocate for the emission-less transportation, it becomes not efficient to sell electric cars for the cryptocurrency which is being blamed for the serious climate damage. After the Elon Musk’s tweet about this new policy, the Bitcoin price dropped by 17%.
Also, Elon Musk said that Tesla will refrain from selling Bitcoin for the same reason. Bitcoin transactions currently run with the help of burning fossil fuels, the strategy which is contrary to the whole idea of technology introduced by Tesla. However, Elon also pointed out that Tesla will consider accepting Bitcoin transactions again once the cryptocurrency will start using a more sustainable energy.
Similar story: Bitcoin mining in China
Studies show that China produces nearly 65% of the global Bitcoin hashing power. Furthermore, by adding up the mining power and transaction maintenance, scientists concluded that China deals with 78.89% of the world’s Bitcoin operations.
Although these mining pools claim to use renewable energy like hydropower, they have an ability to use it mainly during the summer months when heavy rains occur in this particular region. As for the rest of the year, these mining farms tend to use fossil fuel like coal. Because China has large coal plants, the world’s environmental organizations have been expressing doubts regarding their compliance with their own environmental strategy. China palns to reduce carbon emissions by 2030 and stop producing the waste entirely by 2060.
However, the estimated production of carbon dioxide extrapolated to 2024 shows that Chinese Bitcoins will be worth nearly 130.5m metric tons of emissions. This number is equal to the yearly pollution observed in countries like Italy and Saudi Arabia.
The future of Bitcoin
So what happens to Bitcoin in the future? Will the world say no to a cryptocurrency that was a harbinger of the new decentralized model of a global digital economy? The Bitcoin believers try to stay on the positive side and say that the oldest crypto might become green.
Analytics suggest that it is possible to switch to an emission-less production of Bitcoin. If this happens, the world will be saved in both worlds – the economy and the environment. Bitcoin in mobile world might then become a regular means of exchange, just like dollars or euros.
What’s more, it is theoretically possible to determine the source where the Bitcoins were mined. As a result, analysts suggest that green BTC will cost more. On the contrary, the “bad” BTC might become unpopular or simply prohibited by the governments.
More strict climate change laws and regulations might incentivize mining firms and validation nodes to seek new methods of making Bitcoin more eco-friendly, researchers say. On the other hand, they also argue that the world’s corporate structure with offices and millions of employees consuming power from computers, air conditioners, printers, and so on, is also equally harmful for the environment. Another possibility is that alternative cryptocurrencies known as altcoins will become more and more popular as the Bitcoin will be slowly losing its worldwide community support. And, as we can see, even Elon Musk is not that sure about Bitcoin anymore.