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New York State Bans Cryptocurrency “Mining” |  world and science

New York State Bans Cryptocurrency “Mining” | world and science

Mining or creating bitcoin requires about 1,150 kilowatt-hours, which is the consumption of an American household in 40 days.AFP / GEOFFROY VAN DER HASSELT

Posted on 11/23/2020 11:39 AM

New York has banned some of the activities of “mining” cryptocurrency for two years, and creating virtual currencies that require excessive energy consumption. It is the first US state to fully or partially suspend this process that uses computational power (hash rate) to acquire cryptocurrencies.

On Tuesday, the 22nd, the state’s governor, Democrat Kathy Hochul, issued a bill that was voted on by the state parliament that calls for a moratorium on “mining” activities that in some cases consume fossil fuels.

Several specialty companies have acquired old plants in this east coast state of the United States in recent years to fuel this process.

According to the specialized company Digiconomist, mining or creating bitcoin, the most popular cryptocurrency, for example, requires about 1150 kWh, the equivalent of the consumption of an average American household for 40 days.

The ban enacted on Tuesday refers to the so-called “proof-of-work” method, which is considered the most energy-demanding and widely used.

The method consists of a series of complex computer calculations as fast as possible to receive one or more cryptocurrency units. This process is being replaced by the so-called “proof of stake” protocol, which requires no computation and therefore much less electricity.

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The moratorium should allow New York State time to conduct an environmental impact assessment of the activity on its territory.

Several countries have already banned cryptocurrency “mining”, including China, which was by far the world’s leading creator of virtual currencies until June 2021, when it suspended the practice.

The ban in China sparked an exodus that greatly benefited the United States, which is energy self-sufficient and has since become the world’s largest producer of cryptocurrency.

In Europe, Kosovo also banned virtual currency mining in January 2022, when the country was facing energy supply problems and suffered frequent power outages.