A bill was recently passed in the state of New York that imposed a ban on proof-of-work (PoW) mining in the state. However, the legislation has garnered a lot of criticism from the crypto mining community. They have asserted that if the bill is signed into law by the government, it will drive a lot of companies away from the state and elsewhere.
The ban has already been decried by two mining firms in New York and they have stated that it will only lead to an exodus of companies, which means the objects of the moratorium will not be addressed.
Reasons for PoW Ban
The chief executive of GEM Mining, John Warren announced on 8th June that his firm and others were now considering New York to be an unfriendly and unsuitable location for operating their businesses. Environmental sustainability is the primary reason why the government of the state of New York has decided to go ahead with this ban.
The problem associated with the proof-of-work (PoW) mining protocol is that it consumes a great deal of energy. It is because of this carbon footprint that the mining method has become the target of criticism. With this controversial ban on bitcoin mining in place, new companies will not be able to operate in New York for about two years.
In addition, companies that are already operating within New York will not be able to renew their licenses. Only companies that are using 100% renewable energy for their mining operations will be able to get their license renewed. According to GEM Mining’s CEO, not only will this bill not have impact on the targeted audience, but it will also not allow new companies that are using renewable energy to operate within the state.
Warren stated that his company is 97% carbon neutral, but this ban would not allow GEM Mining to continue operating in the state. He said that the regulatory environment would only stand in the way of the target and discourage new miners based on renewable energy to consider doing business in New York. GEM Mining is based in South Carolina and running a bitcoin mining operation.
In May, it was announced that the contribution of the company to the bitcoin mining network is around 1.92 Exahashper second (EH/s).
Mining via Renewable Energy
Last year, China had imposed an outright ban on mining activities in the country and drove the companies out to other locations. The United States became one of the prime locations for mining operations and Texas became the top choice because there are abundant resources of renewable energy available here.
Andy Long, White Rock Management’s chief executive, also spoke about the development and said that Bitcoin mining was moving towards the use of renewable energy, which is the right direction for it. His company’s contribution to the bitcoin mining network is 712 Petahash per second (PH/s) and it uses 100% hydroelectric power.
A similar discussion about banning PoW mining has been ongoing in Europe, as countries are working on crypto regulation.