June 6, 2022
By Murtuza Merchant
In a bid to address environmental concerns over proof of work (PoW) mining, The New York State Senate has passed a Bill that imposes a two-year moratorium on new crypto mining firms that use non-renewable power.
The Bill, which was passed by the state Assembly last month, also sought to pause renewables for existing operating permits.
The Senate Bill S6486D, which was sponsored by Senator Kevin Parker, was passed in a 36-27 win and will now be forwarded to Governor Kathy Hochul for ratification.
According to the provisions of the Bill, a two-year moratorium will be imposed on operations that use PoW consensus to mine cryptocurrencies. These fossil-fueled mining operations are known to be an energy-guzzling method to verify transactions on the blockchain.
For existing mining operations, the Bill also caps their electrical consumption at their current levels.
The Bill, however, does not alter any operations running on renewable sources. It also does not prevent the use of less energy-intensive alternatives to PoW, such as proof-of-stake (PoS), used by many other cryptocurrencies to verify transactions.
The PoW algorithm underpins the industry’s two biggest cryptocurrencies—Bitcoin and Ethereum, with the latter expected to switch to a PoS consensus mechanism in Q3 this year.
Earlier this year, the European Parliament had proposed a similar PoW mining ban, however, amid public scrutiny, it amended the proposal to remove the ban.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.