Friday early morning, New York lawmakers passed legislation banning certain bitcoin mining firms from using carbon-based energy sources. The bill now goes to Governor Kathy Hochul's desk, where she will either sign it or veto it.
What happened: If signed, it would make New York the first state in the country to ban blockchain technology infrastructure, according to Perianne Boring, founder and president of the Chamber of Digital Commerce, reported CNBC.
According to industry insiders, it might have a domino effect across the United States, which is currently at the forefront of the global bitcoin mining sector, accounting for 38% of the world's miners.
The New York bill calls for a two-year moratorium on certain cryptocurrency mining operations which use proof-of-work authentication methods to validate blockchain transactions.
What will be the Effect: "This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State," Boring told CNBC.
One section of the bill calls for a statewide study of the environmental impact of proof-of-work mining operations on New York's ability to meet aggressive climate goals set by the Climate Leadership and Community Protection Act.
"Proof-of-work mining has the potential to lead the global transition to more sustainable energy," Boring told CNBC's Crypto World, pointing to the irony of the moratorium. "The bitcoin mining industry is actually leading in terms of compliance with that Act."
"The regulatory environment in New York will not only halt their target – carbon-based fuel proof of work mining – but will also likely discourage new, renewable-based miners from doing business with the state due to the possibility of more regulatory creep," stated John Warren, CEO of institutional-grade bitcoin mining company GEM Mining.
Photo via Wikimedia Commons