New York State imposed a partial ban on cryptocurrency mining, sending ripple effects throughout the industry and encouraging environmentalists to push for similar measures. The draconian ban on POW mining deters innovation and will most certainly impede efforts to regulate the blockchain industry, therefore, removing the few points of the state has within the industry. It will be difficult, if not impossible, for regulators to detect and prevent illegal activities like money laundering or fraud that affect citizens. In the absence of mining, the cryptocurrency industry isn’t able to function, meaning the rational basis will violate the industry’s constitutional rights.
New York lawmakers ed a two-year moratorium on cryptocurrency mining using electricity from fossil fuel plants. Mining is the process by which Bitcoin (and some other cryptocurrencies) enters into circulation, but it’s also a critical component of the security of the blockchain ledger. Miners operating the computers contribute processing power to a decentralized network that verifies the ledgers by solving complex mathematical equations generated by the protocol. Some argue there’s implacable hostility toward Bitcoin, cryptocurrency mining and unrelated events being juxtaposed to prove an inexistent point in the analysis.
Did NY Times Manipulate Footage of a Bitcoin Mine?
It’s no secret that the New York Times is against Bitcoin, always working on a new exposé on cryptocurrency. It’s largely believed that the daily newspaper based in New York falsified aerial drone photography for one of its articles criticizing Bitcoin mining for giving the impression that the air is smoggy. Bitcoin’s network energy consumption is anything but ideal. Still, everything in this life consumes power – smartphones, laptops, TVs, gaming consoles, refrigerators, electric vehicles, and so forth. NY Times gives readers the false impression that the air has been polluted by Bitcoin mining when, in reality, there are no direct greenhouse gas effects from sources controlled or owned by mining operators.
There’s no denying the investigative work of the reporters from the NY Times, as they deliver interesting facts and insights. Nevertheless, David Z. Morris from Coindesk points out this isn’t sufficient to meet the needs of the higher-ups, and, at times, reporters are pressured to transform their reporting into something it’s not. The author of the article affirms it’s not completely correct or exact to say that Bitcoin miners create higher energy bills because using electricity in a capitalist economy doesn’t result in higher prices for other consumers. Actually, miners soak up the excess energy, helping stabilize the grid and reducing waste.
The Intention Behind NY’s Ban Is Noble, But It’s Detrimental to Innovation
New York became the first state in the country to enforce a temporary prohibition on cryptocurrency mining permits at fossil fuel power stations in an attempt to address environmental concerns over the energy-intensive activity. Regrettably, this could cause harm to innovation within the FinTech sector, pushing miners to sell or ship their equipment overseas and invest in more welcoming jurisdictions. Rather than adopting a punitive approach, the state should help the cryptocurrency industry find solutions to allow mining operations to proceed while also protecting the environment. The right to mine should prohibit local governments from restricting cryptocurrency mining. What is more, Bitcoin miners should be offered the same electricity rates as other industrial clients.
More Than 50% Of Bitcoin Mining Uses Renewable Energy Sources
According to Nasdaq, Bitcoin mining leverages a mix of sustainable energy of up to 58.4%, meaning it’s one of the most sustainable industries in the world. Bitcoin mining’s demand for renewable energy will most likely stimulate the establishment of companies and facilities offering wind power, solar power, hydropower, and so on. Besides competition, Bitcoin halvings can accelerate green energy adoption, pressuring miners to seek efficiency whenever possible. Ethereum moved towards a Proof of Stake protocol in 2022, and it’s hoped that Bitcoin will do the same, even if it’s a highly unlikely outcome given the many obstacles present (e.g., the element of control).
Norway, which has access to hydropower and low demand, sets a good example as far as green cryptocurrency mining is concerned; Bitcoin miners are more environmentally friendly here than anywhere else on the planet. The energy crisis affecting Europe worsened in southern Norway, but the situation is completely different in the north. More precisely, there’s enough water, so the prices are frequently a fraction of the prices in the south. All in all, regulators should consider new ways to protect investors and discourage fraudulent activities. Undertaking an environmental assessment won’t necessarily reveal inconvenient details but one-of-a-kind opportunities.
What Is the Future of Bitcoin Mining?
The Proof of Work consensus algorithm has long been scrutinized over its power consumption. There’s no denying the fact that most Bitcoin miners use 100% renewable energy, but let’s not forget that others still rely on fossil fuel alternatives, having an impact on climate change. It’s safe to argue that POW will become less prevalent in the cryptocurrency industry, so maybe we’ll see Bitcoin transition to a sustainable POS model like Ethereum. Mining facilities operate similarly to data centers, which basically means they’re major employers and economic drivers for communities. The jobs in question could bring millions of dollars in wages, local economic activity, and state/local taxes.
Approximately 19 million Bitcoins have been mined and placed in circulation, leaving roughly 2 million to be mined, so mainstream investors should pay close attention to the asset class because there’s plenty of room for growth. Bitcoin creates a sense of exclusivity; there’s no way to create more of it, so it’s an excellent hedge against inflation. Equally, decentralization will continue to make Bitcoin a desirable asset, as it will democratize finance by imposing peer-to-peer relationships. Whatever happens in the future, Bitcoin mining will most certainly take center stage, not just in the great energy debate.
Conclusion
New York’s Governor signed one of the most restrictive bills in America on regulating Bitcoin mining (it’s the first state to impose such a ban). The signed moratorium prohibits POW mining facilities, so companies that leverage renewable energy sources are exempt from the new law. Many agree that such a ban would affect New York’s economy.
