

New York has to put the brakes on cryptomining. Here's why | Opinion

Anna Kelles
Special to the USA TODAY Network

Efforts to prevent climate change have reached a new level of urgency, with recent reports by the World Meteorological Organization indicating that a “crucial tipping point” is likely to be crossed within five years. There is little time left to take bold action, and we cannot afford to go backwards in reaching New York State’s climate goals.

Yet if the cryptomining industry expands in New York, the energy it uses could drastically undermine the state’s climate goals.

These “mining” activities use enormous amounts of energy to power the computers.  Across the state, the most inefficient, old, and retired power plants that run on fossil fuels are at risk of being purchased and turned back on to run 365 days out of the year to provide cheap energy for Proof-of-Work-based cryptocurrency mining operations.

Cryptomining is a relatively new technology that provides the basis for cryptocurrency.  Cryptocurrencies such as Bitcoin are virtual currencies, which means they exist only online and there are no physical notes and coins. Cryptocurrencies don’t belong to a central bank, meaning they have no government backing. They are international currencies and can be used to send money around the world without any identity checks, making them a popular choice for cybercriminals involved in malicious or criminal activity.  In the ransomware attack on the Colonial pipeline, for example, the criminals were paid their “ransom” in cryptocurrency. 

Digital currencies require authentication to prevent fraudulent transactions. Proof-of-Work is the method that has the most significant energy demands. In PoW authentication, complex mathematical equations are assigned to each transaction and miners compete to solve them. The first one to solve an equation authenticates the transaction and wins currency for their effort. The equations can only be solved by brute force guesswork, so the person or company with the most computational power wins the most currency. With some currencies valued at over $36,000 a coin, albeit in a highly speculative market, a global digital gold rush is taking place with hundreds of millions of computers competing for an edge in the market.

There are very few jobs created by this industry, with profits accruing to the few, but the environmental impacts affecting us all, particularly BIPOC communities that are often located near fossil fuel power plants.

To maximize profits, cryptomining companies are driven to find ever cheaper sources of energy. An old retired powerplant in a state with moderate temperatures, large bodies of freshwater, and clean air provide the perfect set-up. New York State has spent years improving the efficiency of our energy grid to address climate change, but we have left our back door open through these old, retired power plants. With the plants back up and running full time for in-house PoW cryptomining, and freshwater as a free coolant, it will provide the cheap energy and efficient coolant systems to allow private companies, often backed by private equity firms, to thrive at the sacrifice of state climate goals.

State climate law requires 100% zero-emission electricity by 2040 and 85% reduction in greenhouse gas emissions by 2050. Can we reach these goals if our total energy consumption is skyrocketing because of a digital authentication method that uses more energy than all but 28 countries in the world, and more energy than Google, Facebook and Amazon combined?

Piggy bank with crypto token in slot.

We need a pause on this move to turn old power plants into cryptomining centers until we can do a full environmental assessment on the impact of these operations on our greenhouse gas emissions as well as our air and water quality.

My legislation (A7389-A/S6486-B), currently under consideration in Albany, would create a moratorium on new PoW-based cryptocurrency mining facilities and require a full generic environmental impact assessment by the DEC. The state Senate has approved the measure and it is now up to the Assembly to act.  With five years before we reach 1.5 degrees Celsius global temperature increase, we owe New Yorkers an honest, transparent and careful evaluation of PoW-based cryptocurrency mining on our goals and our future.

Anna Kelles, a Democrat, is a member of the state  Assembly, representing the125th district in central New York.