JVTech News Bitcoin: New York heralds good news for the environment, but bad news for crypto miners
With the threat of an energy crisis, some governments are already taking action. In the first line of fire are, of course, the miners of Bitcoin and other cryptocurrencies who require the use of computing power. To save electricity, the state of New York just issued an ultimatum to crypto mining professionals.
New York cryptocurrency miners cornered
As you surely know, to be mined, Bitcoin requires a great deal of computing power which is achieved by permanently running computer components such as graphics cards. This also applies to all other cryptocurrencies based on proof of work (PoW) operation. As a result, these virtual currencies are undeniably energy intensive given their abundant electricity consumption. While several countries tend to organize massive energy savings, the mining industry also has to comply with new measures.
It is in the United States, specifically in the state of New York, that a new law has appeared that targets crypto miners. This new announcement will severely limit the activity of bitcoin miners in New York State. In fact, they are now forced to mine their BTC using only renewable energy. This is obviously good news for the environment, but for mining professionals it’s another story…
Released last Tuesday, this announcement will force crypto miners to relocate from New York if they cannot guarantee green mining. All mining companies using carbon energies will be permanently banned by the state. For the moment, this restriction only affects this territory, but other states may adopt similar measures in the future. This news will likely have repercussions for the top cryptocurrency as New York state is the 4th largest Bitcoin miner in the country.
Are alternatives possible for Bitcoin miners?
Although rather restrictive, this new provision offers minors the possibility of showing a more eco-responsible image of their business. However, investing in green infrastructure remains costly and some will surely have to find alternatives.
The first option could be to fall back on another cryptocurrency. Indeed, in the cryptocurrency industry, there are not only proof-of-work currencies. Other virtual assets run on proof of stakes such as the second largest crypto: Ethereum (ETH). To be mined, it uses not the computing power of graphics cards, but the miners’ money.
However, this scenario seems unlikely as mining companies would be forced to sell all their machines, which are obsolete in this context. The most realistic is still the relocation of some miners to other regions.
Quebec, the European Union, the United States, more and more governments are addressing the issue of Bitcoin energy consumption. Given the context, it is certain that these questions must be asked. However, some may take advantage of this argument to permanently extinguish Bitcoin. As a true enemy of traditional banks, Satoshi’s creation has disturbed some institutions for several years.
This is the case of the Chinese government, which definitively banned mining on its territory in June 2021. Despite these measures, clandestine mining farms are thriving and the country is still the world’s second largest producer of Bitcoin.