New York State Cracks Down on Bitcoin Miners Buying Old Coal Plants – Is There a Price Rise?

Essays by Eric Worrall

When ordinary people lost power and prices rose, Bitcoin miners restarted unwanted old coal plants, to produce the vast amounts of cheap, reliable energy needed to mint new bitcoins. .

New York Cracks Down on Carbon Fueled Cryptocurrency Mining Operations

Two-year ban comes as state tries to reduce emissions by 85%

Richard curry
Wednesday, November 23, 2022 // 17:01 UTC

The state of New York has banned a practice that is becoming more common in the cryptocurrency mining industry – rescuing and repurposing abandoned fossil fuel plants to power exclusively for mining. digital.

Governor Kathy Hochul yesterday issued a receipt in works as of May 2021 establishing a two-year moratorium on applications or permits for “a power generation facility that uses carbon-based fuels and provides, in whole or in part, energy electricity consumed or used behind the clock by cryptocurrency mining operations that use proof-of-work authentication to validate blockchain transactions.” This includes applications for such license renewals.

The bill cites the climate change contribution of dirty fuel plants at a time when the state has committed to reducing greenhouse gas emissions by 85 percent by 2050, with “zero net emissions of all all sectors of the economy at that time.”

While noting that the industry is growing in New York, the bill says: “The continuation and expansion of cryptocurrency mining runs proof-of-work authentication methods to validate tokens. blockchain transactions will significantly increase energy usage in the state of New York and impact compliance with the Climate Leadership and Community Protection Act.”

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Read more: https://www.theregister.com/2022/11/23/new_york_crypto_mining_ban/

I love this story, because it completely mocks the claims that coal is too expensive or unreliable.

Bitcoin mining, despite the glitz, is a marginal business. Making a profit requires a reliable but very cheap power supply.

To “mine” bitcoin, mining computers must provide a “Proof of Work,” the solution to a difficult cryptographic math puzzle. The puzzle is not mathematically complex, the difficulty is that trillions of attempts are required to find the missing key, to produce a valid solution – like brute force breaking with a computer, trying different different keys until you find a suitable solution. Each cryptographically secures not only the latest transactions but all previous transactions, so solving these difficult equations helps secure the bitcoin ledger from tampering and theft. Difficulty in solving puzzles and numerous independent ledger copies create an almost insurmountable obstacle to tampering with past transactions. Those who contribute to the Bitcoin community by helping to secure the transaction ledger against tampering, by solving these incredibly difficult “proof of work” cryptographic puzzles, will be rewarded with newly minted bitcoins.

The specialized computers needed to solve this cryptographic puzzle and find the missing key in a reasonable time are very expensive, but the truly deadly cost is the cost of electricity required to run those machines. that’s expensive.

U.S. Bitcoin mining has until recently lagged behind China, because Americans pay more for energy than the Chinese. But Chinese authorities have discovered wealthy citizens are using Bitcoin to circumvent China’s strict currency control laws, transporting their cryptocurrency out of the country, out of the Party’s reach. Communism. To suggest that they are less interested would be an understatement. The discovery has sparked a harsh Chinese crackdown on cryptocurrencies, which has caused a huge dent in China’s bitcoin mining.

Bitcoin miners need a cheap and fast new source of energy.

They have found their source of energy – the coal plants of the United States have been abandoned. The punitive environmental laws passed by green energy have haunted US politicians by shutting down coal plants that apply only to coal plants that feed the grid. Bitcoin miners don’t want to power the grid, they want to power their bitcoin mining computers, so miners started to take advantage of this loophole in environmental law, by restarting miners. coal machines, but use all the electricity produced by those coal plants to run bitcoin mining computers on site.

This must have been extremely confusing for green politicians who try to convince voters to accept the price increase and close the coal plant. Imagine the political consequences if, after witnessing coal plants being forced to close, voters who lost power green energy in the middle of winter witnessed the local coal plant. Their facilities are operating at full capacity, to power bitcoin mining rigs instead of providing heat and electricity for their homes.

Now, New York State has followed in the footsteps of the Chinese Communist Party, and moved to put an end to this embarrassing contradiction to its green energy narratives by working to ensure that That frozen coal plant will shut down.