On November 22, New York Governor Kathy Hochul officially enacted a two-year ban on proof-of-work cryptocurrency mining, making it the first state in America to do so.
The PoW mining ban will not only forbid new mining operations but will also prevent companies that are already operating in the state from renewing their permits. Any brand-new PoW mining business in the state is only permitted to run if it completely relies on renewable energy.
The state assembly first approved the PoW mining measure in April of this year, and the State Senate later approved it in June. Due to lobbyist pressure and to reach its carbon emission goals, Governor Hochul ultimately signed the bill into law.
The majority of Bitcoin miners and a few miners of a few other altcoins use the PoW mining consensus. It is thought to be one of the most secure and decentralized methods of verifying a transaction on a blockchain. The practice has, however, been tainted by debates over its high energy use.
With the U.S. accounting for 37.8% of the hash rate of the Bitcoin network, the United States now has the highest proportion of the global Bitcoin mining hash rate. The two-year ban on PoW mining may be expensive, and it may even spur other states to take the same course.
Although the FUD around proof-of-work (PoW) mining is nothing new and has been thoroughly debunked, there has been extensive lobbying over the past year, particularly from those who support proof-of-stake (PoS) mining.
On the other hand, lawmakers have conveniently ignored research studies indicating that a sizable portion of the energy used for Bitcoin mining originates from renewable sources. According to research by the Bitcoin Mining Council, the BTC network uses electricity from clean sources for more than 60% of its needs.
Similar PoW restrictions were proposed by European crypto regulators in their Markets in Crypto Assets (MiCA) legal framework. The MiCa Act was passed without a restriction on operations using digital assets based on PoW, as the supporters of such a ban were unable to secure enough support.