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…
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