Bitcoin miners say NY ban will be ineffective and ‘isolate’ the state

Cointelegraph was informed by two Bitcoin miners that if the bill to ban Proof-of-Work mining in New York for two years is passed, it will trigger a exodus and not address the original goals.

John Warren, CEO of GEM Mining, told Cointelegraph that he and others now consider New York a hostile place where they wouldn’t want to open a shop.

“Miners won’t consider going there once the ban was part of the discussion.”

The argument against Proof-of-Work (PoW), or any other form of mining, has been based on environmental sustainability. For the next two years, the controversial mining ban bill would prevent any new mining operations in New York. It would also prohibit the renewal of existing licenses for those already operating in the state, unless the state uses 100% renewable energy.

GEM Mining commented recently that the bill would not only miss its target, but also discourage new, renewable-based miners to do business in the state. Warren stated to Cointelegraph that 97% of his operation is carbon neutral.

“The regulatory environment in New York will stop their target…but it will likely discourage new, renewable-based miners doing business with state …”. The NY mining moratorium was recently passed. We shared our thoughts with @CNBC
— GEM Mining (@GEM_Mining) June 8, 2022

GEM Mining, a South Carolina-based Bitcoin mining operation (BTC), contributes 1.92 Exahash per Second (EH/s), of hash power the Bitcoin network as at May.

Similar sentiments were expressed by Andy Long, CEO of White Rock Management digital asset mining company based in Sweden. He stated that Bitcoin mining was “moving towards fossil-free energy use,” in an emailed comment to Cointelegraph.

The company is 100% dependent on hydroelectric power to provide its 712 Petahash per Second (PH/s), hash power contribution.

Long reiterated the notion that the PoW mining freeze would not have the desired effect and sends a wrong message.

“We want more states and local governments to encourage investment, rather than stifle it with prescriptive regulations. This would likely be the thin tip of the wedge.”

According to the Cambridge Bitcoin Electricity Consumption Index, (CBECI), roughly 10% of America’s hashing power is generated in New York. It is the fourth largest producer of the cryptocurrency. According to a survey conducted by the Bitcoin Mining Council, 58% of energy used in mining was from renewable sources as of April.

California: How New York moves

If the bill becomes effective, it could lead to a flow of New York-based mining companies into other states, just like how miners fled China last year in a rush after its mining ban.

Warren, GEM Mining, believes that the contributions of other states will continue growing regardless of whether the moratorium goes into effect. He added that it would not cause a domino effect by other bans except that “New York goes, Cali goes.”

He said that even if Governor Hochul signed the moratorium into law, New York’s hashpower would still drop as Kentucky, North Carolina and Texas add new incentives to miners.

“What you see across the country is a bipartisan support for mining and the jobs they provide. They also add stability to our power grid.”

Square up to the competition

New York is losing out to states like Georgia and Kentucky for miners. Georgia is America’s most popular state for hashpower. Fortune reported that miners might be moving to Georgia for the lower cost of electricity and the possibility of earning renewable credits. Georgia gets 35.6% of its electricity both from renewable and nuclear sources.

Andy Beshear, Kentucky’s governor, signed into law last month a tax incentive to Bitcoin miners who open a shop in the state and support its fledgling renewable energy infrastructure. Kentucky’s hash power is third in the union, but it produces 6.6% of its electricity using renewable sources.

Related: IMF recommends ecofriendly CBDCs and other non-PoW payment mechanisms

The controversial mining bill currently sits on Kathy Hochul’s desk. Hochul has not publicly committed to signing it. She said instead that her team would be “very closely” studying the proposal in the coming months.