New York Bill to Ban Bitcoin Mining: What Does This Mean for Crypto?
Over the last few days, the crypto community has been in an uproar when the US bill to ban Bitcoin mining was passed. This Bitcoin mining moratorium bars new mining operations that are powered by carbon-based energy sources for the next two years. After being passed successfully by the New York state assembly, the Senate voted in favour of the bill, 36-27.
The bill passed successfully in a bid to address the environmental impact posed by the mining of cryptocurrencies. During the moratorium, the state is set to study and address the environmental impact of proof-of-work mining.
What the ban means for crypto
New York City has always been the US hub for crypto activity. Its cheap hydroelectric sources have made it the base for many crypto companies, including Gemini and OpenSea. Sadly, with the passing of this bill, there has been major backlash from the crypto community. Many crypto enthusiasts thought the bill would die early as it was viewed as a ban on mining outright.
However, the bill has passed successfully, raising tensions in the crypto space. Leaders in the crypto industry have taken to social media to protest the bill’s impact. They assert that the bill lays the groundwork for future legislation that threatens the mining industry all over the country. Also, the bill sends a message to investors that says, “You’re not welcome here”. Thus, how this bill affects crypto involves both mining and investing.
How The Bill Affects Crypto Mining
Bitcoin industry leaders consider the ban an affront against the entire crypto industry. The bill specifically targets proof-of-work, which uses a lot of energy to validate blockchain transactions. Some of the most popular coins, Bitcoin, Ethereum, and Dogecoin, are tokenized by proof-of-work. This move by New York poses several problems for major cryptocurrency agencies. The US is at the forefront of the global mining industry, accounting for 38% of the world’s miners. This bill will largely affect the number and circulation of Bitcoin. In addition, New York is the economic centre of the US and is setting the trend for other states to follow.
How The Bill Affects Crypto Investing
Many innovators and entrepreneurs will leave New York City to invest in more crypto-welcoming cities like Florida. This exodus will lead to a dearth of new businesses and the death of disruptive technological solutions in New York. The consequences of this will be lower job opportunities and tax dollars that should be used to make an economy thrive. Crypto companies will have to migrate to a more favourable climate for better investing chances. CEOs like Mike Colyer of Foundry have lambasted the bill saying customers are scared of investing in NY. Some who are against the ban on mining see the bill as a policy error from the world’s financial capital.
Overall, the silver lining in this bill is that during the moratorium, some crypto businesses will still be allowed to operate. Such businesses are the ones that use 100% renewable energy proof-of-work mining. Aside from this, many crypto companies will have to find their root in states with less stringent laws like Texas and Tennessee. Although the Senate passed the bill already, New York governor Kathy Hochul still has to sign or veto it.