The New York State Senate bill, introduced by Senator Kevin Parker, would require a study on the greenhouse gas emissions caused by cryptocurrency mining, as well as its effects on air, water, and wildlife. In the meantime, no mining would be allowed.
“Cryptocurrency mining threatens not only New York’s climate goals, under the CLCPA, but also global energy policy, such as the Paris Agreement,” Senate Bill S6486 says. Accordingly, “there shall be a three-year moratorium on the operation of cryptocurrency mining centers in the state, including, but not limited to cryptocurrency mining centers located in converted fossil fuel power plants.”
Bitcoin and other cryptocurrencies exist only online, so it may be hard to imagine how they’re “mined,” let alone how that mining could emit greenhouse gases.
But experts say the production of Bitcoin does consume a lot of energy. Computer whizzes “mine” it by racing to guess a random number, one of which is released approximately every 10 minutes, in a chase that involves huge quantities of processing power. The winner is rewarded with a coin.
According to the Cambridge Center for Alternative Finance, this mining consumes about 110 Terawatt Hours of power per year, or 0.55% of the world’s energy production. That’s as much energy as some small countries consume annually – a fact that the New York bill references.
“A single cryptocurrency transaction uses the same amount of energy that an average American household uses in one month, with an estimated level of global energy usage equivalent to that of the country of Sweden,” the bill says.
However, high energy use does not necessarily mean high greenhouse gas emissions. According to the Harvard Business Review, the carbon footprint of Bitcoin mining really depends on which energy sources are used – and that’s something the notoriously secretive miners haven’t been very open about.
According to a 2019 report by the group CoinShares, 73 per cent of bitcoin’s energy use is carbon neutral – but that’s just one report.
If the New York bill is passed, the state will make its own report, and New Yorkers will have 120 days to comment on it at public hearings.