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USA: New York State Bans Cryptocurrency 'Mining'

USA: New York State Bans Cryptocurrency ‘Mining’

New York State has for two years banned a segment of cryptocurrency “mining” operations, creating virtual currencies that require excessive energy consumption. It is the first US state to completely or partially suspend the process of using computational power (hash rate) to acquire cryptocurrencies.

The state’s governor, Democrat Kathy Hochul, released a speech on Tuesday voted by the state legislature that bans these “mining” operations, which in some cases consume fossil fuels.

Several specialty companies have acquired old plants in this state on America’s East Coast in recent years to provide this process.

According to the specialist company Digiconomist, mining or generating Bitcoin, the most popular cryptocurrency, for example, requires about 1,150 kilowatt hours, which is equivalent to the average consumption of an American home for 40 days.

The ban enacted Tuesday addresses the “proof-of-work” system, which is more energy-intensive and widely used. The method consists of a series of complex computer calculations to obtain one or more units of cryptocurrency.

This process is replaced by a so-called “stake-proof” protocol, which requires no computation and therefore very little electricity.

This moratorium should allow New York State time to conduct an environmental impact assessment of operations in its territory.

Many countries have already banned the “mining” of cryptocurrencies, including China, which has suspended the practice until June 2021, the world’s leading creator of virtual currencies.

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

In Europe, Kosovo also banned the mining of virtual currencies in January 2022, when it faced problems with electricity supply and suffered frequent blackouts.

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(AFP)