Cryptocurrency mining often requires massive amounts of electricity, especially for proof-of-work chains like Bitcoin. That power sometimes comes from fossil fuels, which the state of New York wants to limit.
New York Governor Kathy Hochul signed a bill into law on Tuesday that aims to limit the use of environmentally-damaging fossil fuels for cryptocurrency mining. It sets a two-year moratorium on new and renewed air permits for fossil fuel power plants used for energy-intensive cryptocurrency mining. The law also instructs New York’s Department of Environment Conservation to evaluate how cryptocurrency mining affects the state’s climate goals.
Governor Hochul said in a statement, “I will ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of our environment.”
Environmental impact is a common criticism of cryptocurrency, as many blockchains are built on proof-of-work, which uses significant amounts of energy to verify each transaction compared to regular banks and digital payments. Newer blockchains use a more efficient proof-of-stake model, but not Bitcoin and some other chains. The Ethereum blockchain migrated to proof-of-stake earlier this year.
The extensive use of fossil fuels is one of the most significant problems with cryptocurrency. Many other industries rely heavily on fossil fuels, but at least you usually get something useful in the end, like a car or computer. Pumping toxic fumes into the air for Bitcoin mining just gets you money that isn’t very good at being money.
Source: Associated Press