New York cracks down on carbon fuel-based crypto-mining operations New York State has banned a practice becoming more common in the crypto-mining industry – the rescuing and repurposing of mothballed fossil fuel plants to exclusively provide energy for mining digital currency. Governor Kathy Hochul yesterday enacted a bill in the works since May 2021 that establishes a two-year moratorium on …
The [proof-of-work] mining industry has been spurring economic growth, job creation, and inclusion for historically underrepresented populations in New York
How? These places are as bad (or worse) than cloud data centres: 99% of the employment is done remotely and the only local employment is a minimum wage security guard and a dog*.
[*] The dog is to stop the security guard from touching anything.
If only one job is created, it counts. Doesn't count for much, but it counts. They can also claim the headcount required to run the formerly decomissioned plant.
Mind you, I'm not supporting this. Personally I think the idea of AGW global warming is a bunch of hooey, but burning a polluting fuel for crypto mining is a crime. Burning it so people can live is one thing, but crypto is taking something and turning it into nothing and that's flat out wasteful.
"These places are as bad (or worse) than cloud data centres
That is a really good point. I've personally visited a crypto mining operation. It was a couple dozen server racks, and some heavy-duty fans ventilating to outside air. No air conditioning. No UPS. No emergency generator. They had three extra 400a power transformers on the pole outside.
I have also been by the AWS data center in Virginia. It is absolutely massive. I don't see crypo miners building data centers on that scale!
Here is a question... How much compute (ie: power) is being consumed by cloud based data centers to operate our modern banking system? I have no idea how we could answer that question. I will wager it is a lot and crypto mining is a comparative mouse fart.
Staying on topic...
Since this is NY state, will they also regulate the amount of power available to operate Wall Street? That is what we are talking about here, right? Competing financial systems. One being permitted electricity by the government. One being oppressed by the government. Or is this too conspiratorial?
three extra 400a power transformers on the pole outside
What you visited was tiny. There are some that use tens of megawatts, thus why they tend to be located at decommissioned power plants or heavy industrial sites - they need an on-site substation to supply the amount of power they draw.
"Or is this too conspiratorial?"
Sorry, but yes it is. Some of your arguments would have some validity if it weren't for two problems: you haven't done anything to calibrate your assumptions and cryptocurrency isn't working.
We'll start with the one about datacenter power usage. They use a lot of power to run a lot of things. Not all datacenter power bills are to run the financial system, in fact few of them are for that. However, you assume, based on not looking up any numbers, that cryptocurrency mining is a lot less. While identifying which servers are part of the financial industry is hard, it's not hard to understand that something that uses power on the scale of a developed country isn't going to be dwarfed by much. An argument for cryptocurrency gave a number of 26 TWH for financial industry server usage in 2020. I don't know where they got it, but they're arguing for cryptocurrency being small in comparison, so let's let them have their number. Bitcoin mining, note not all cryptocurrencies, used 90.6 TWH. Not small in comparison. The people arguing for cryptocurrency used various other estimated numbers to try to bring the finance industry up, such as estimating power used by bank branches (valid, but hard to guess at) and payment terminals (invalid, as cryptocurrency would need terminals as well). Even with all their numbers taken into account, including invalid ones, the finance industry used 125% of Bitcoin's usage.
Let's also consider what that difference entails. The finance industry does a lot of things wrong, which it can manage because it does a lot of things. It manages transactions from nearly everybody to nearly everything. Cryptocurrency doesn't. Cryptocurrency is not used for average transactions on the scale of existing systems, or by anything near as many people. Except with a massive overhaul, cryptocurrency cannot serve the purpose of the financial system without scaling up a lot, with significantly more power usage required.
This comment got long, so I'll leave it here and come back to other parts later.
They would stop printing fiat currency.
The whole purpose of crypto is to get away from the loss we all share when our governments devalue our wages and savings. In 1950 an ounce of silver would buy the same amount of gas as it will now. Silver did not lose value, the government backed currency did. Let's go back to copper pennies and remove the restriction on melting it down to sell as raw copper. That will lock the government into keeping the dollar worth the same. The first government to go back on the gold standard will become the world currency. Crypto would die a slow death and we would have our saving when we get old, no more "too big to fail" bailouts, no college debt forgiveness and NO MORE WARS, they could not afford it!
There's so many things wrong with this post. All metals are traded (including gold, silver and copper). The price of them will fluctuate depending on demand and supply. Even when it was used as a backing for a currency, the gold standard was a volatile monetary system.
You want the gold standard? No problem. There's a reason that countries stopped doing it, and it wasn't just because they want to print money for free, but if you want it, you can have it. You don't need cryptocurrency for it either. People have been advocating for its return for some time, and they found a way to get it: pay with gold.
In most places, you can carry as much gold as you like, you can pay banks to store excess gold, and you can give people gold. All you need to do now is start carrying it and convince people to take it in exchange. If you want to use cryptocurrency, you have to do both of the same things. If you don't like using gold, use any other metal you like. You asked for copper coins, so get some copper and pay with that. Of course you may find that your copper fluctuates in value with relation to gold, but that's what you get when using mineral currency. I'll also point out that copper wasn't coined (as in used for its monetary value) under the gold standard. It was made into coins which were valued in gold. Your suggestion might end up being even worse than the gold standard, but you can have it.
Thanks for the responses to my post.
My skill is not in word smithing so please allow me to add context. I am not for carrying any metals around. In our state we have forfeiture laws. If a highway officer thinks you might have a large amount of gold, silver or cash (say, in excess of $5k) they will take and say it might be used to buy drugs. No charges or trial, just outright theft. You can find many examples online.
I am not for wasting energy on cryptos. My datacenters are in office buildings. During the winter, we pull cold air from the outside and use the heat created to heat the buildings. Maybe someone can come up with a crypto heater?
What I am for is taking away the unlimited blank check our governments seem to have in printing money. Retired people on fixed incomes are having problems paying for the energy to stay alive while our leaders think it is ok to inflate away their debt from their waste.
The people on this form are the ones that solve the problems. This can be solved, write a suggestion and it might spark something in someone else who reading your suggestions.
Alright, I'm back for the next point, specifically this allegation: "One [cryptocurrency] being oppressed by the government."
You need to learn what oppression is like. Here's a hint. Being regulated for environmental damage is not oppression. The same things apply to any large power-hungry industry. If someone wanted to set up an aluminium smelting operation in New York, they'd need permits and would be heavily regulated. Smelting uses a massive amount of power and produces pollution. Running a coal powered mining operation does both of the same things. There's a reason you need permits and why such things are limited.
Here's what oppression would look like. If the U.S. wanted cryptocurrency to die, they would ban transactions in it. Or they could create new tax laws to take it. Or they would ban mining outright, rather than just restricting building power plants for the purpose. Some people would welcome those moves, but I would not. There's a marked difference between those moves and a sane and entirely precedented environmental regulation. Painting this as oppression suggests you either have no idea what oppression is or that you feel there would be a benefit in advertising something with fake enemies. Far from oppressing cryptocurrency, most countries have been facilitating it both directly such as the incentives given by Kentucky in this article or indirectly through lax regulation on connected industries allowing legitimate exchanges and scams alike to thrive.
A cryptocurrency transaction uses in the order of 10,000,000 times as much electricity as a regular banking transaction.
Also, remember that most of what a bank does is not moving money between accounts, and would still need to be done regardless of the underlying currency. For example, if you want a mortgage, the process is the same whether it is denominated in USD or Bitcoin.
> "The [proof-of-work] mining industry has been spurring economic growth, job creation, and inclusion for historically underrepresented populations in New York, while also creating financial incentives for the buildout of renewable energy infrastructure."
Citation needed
> With this legislation becoming law, we expect the mining companies, or those considering business in the state, to leave and head to more friendly regulatory jurisdictions in the US
Given the way that bitcoin has dropped in value by nearly 75% in the last 12 months, and how ethereum has moved to proof of stake, I would have thought that these dirty power plants are likely to be costing more to run than they're earning in virtual monies. Which by the same token means that I wouldn't be surprised to see some of the affected crypto-bros making a bid to break out of their contracts while using this new legislation as a legal excuse...
It is a shame that they can't get Indian Point nuclear power station back on-line after Hochul's predecessor had it closed down so his mates could build new natural gas fired power stations.
I'm also intrigued as to how NY is planning to power the new Micron semi plant they have announced....
The FTX debacle is going to result in a LOT of crypto regulation in the US.
Nuclear power plants cost more to run than coal ones - this is why there have been so few planned since the 1960s
It was costs which was the main driver of abandoning plans to build nuclear and sites in-progress. not protesters. Environmentalists have never suceeded in stopping anything which was actually profitable and are frequently used as an excuse to get out of marginal businesses without penalties being imposed
Change the underlaying nuclear technology to something which costs 80% less to build/run and reduces waste dramatically (ie: Molten Salts) and the math changes markedly - but Molten Salt nuclear technology has been illegal since 1972 in the USA (you can have molten salt and you can have nuclear, but you can't put radioactives in your molten salts)
It is not possible to simply switch on a power plant. There is a specific start-up process that takes an extended period of time.
We are entering the winter months and peak demand for heat. Solar & wind are fine when the wind is blowing and the sun is shining, but they provide no reserve storage capacity. Hydro does provide reserve storage capacity, but it is limited in how much it can produce on its own during dark windless nights. That means to handle the peak demand during those times we need additional power generation capabilities.
We cannot just flip a switch and turn on a natural gas or coal generation facility when the weather forecast calls for a calm & cloud day. It takes too long to start them up. Therefore the additional generation facilities need to be on-line and generating power at a minimum level so that they can surge when needed.
On sunny & windy days this excess capacity is not needed. Hydro can be throttled back, but they still need a minimum release to maintain river flows and to handle flood controls. Forget about nuclear, we have only added two power plants in the past 26 years in the U.S. That leaves us with natural gas/coal for reserve power generation capacity.
Let's not forget the peak is getting higher as electric vehicles become more common. People come home, turn on the heat, utilize hot water, turn on lights, and plug in their 240v vehicle charger. The generating supply needs to be able to meet this peak demand, and the peak is only getting higher.
So what do we do with this excess capacity during off-peak times? Should we channel it to ground and waste it? Or do we allow crypo-miners to utilize it?
On a sunny & windy day the 'green' energy will be flowing strong. Yet there are minimum required water releases from hydro and the natural gas/coal plants still need to generate power at a minimum level to stay on-line. What is wrong with the crypto-miners paying for this excess capacity that would otherwise be wasted?
>We cannot just flip a switch and turn on a natural gas ... generation facility when the weather forecast calls for a calm & cloud day
Erm you can, that's precisely why people have been building gas plants - to do very lucrative peak demand load capacity.
The smaller town scale ones based on jet turbine engines can spin up in under a minute - the larger ones which are basically just coal stations replumbed to burn gas take a lot longer.
Nuclear and hydro can ironically be spun up very quickly but since they are almost all fixed cost - once you've built them you tend to run them flat out as base load.
You can let cryptominers or anyone else you want use this excess. There's a big difference between that and letting them turn on new power plants for their own steady use. One of the differences is that cryptominers don't tend to want to do the former if they can do the latter. While they can switch on or off at will, they've bought equipment and they want to run it as much as they can. Being told to turn off now because demand is increasing isn't something they want, which is a reason the rich ones have been buying power plants.
These people aren't running power plants because the rest of the grid needs them. In some cases, they're not even connected to the grid. They're running the plants for their own use, and as with any particularly costly activity, governments regulate such things.
-> Kentucky, meanwhile, is actively trying to attract investment from mining companies by exempting them from electricity sales tax.
So what does Kentucky get out of it, barring a few people running machines in shipping containers? What is the "investment" exactly?
The politician can make the following statements based on the cryptomining operations:
1. Anyone mining coal: look, I've made it so these coal power plants will never shut down by attracting users. Your jobs are safe. Don't think about whether that's actually likely given how easy it is to move the equipment.
2. Anyone unemployed: look, I'm attracting new industries to this area, both in running plants and operating mining equipment. Don't think about how many jobs that actually is.
3. Anyone in state government: look, by giving them a tax break, I've attracted the business of people who make lots of money. Imagine how much they could bring to the local economy that's still taxed. Don't think about the fact that none of the rich people are actually needed here to run their expensive equipment.
4. To opponent for next election: look, under my leadership, we're bringing high-tech industries and jobs to revitalize our economy. Don't think about the fact that the high-tech part was written by programmers and made by ASIC designers all over the place and is done now.
That is unless the cryptocurrency investors cut out the political angle and gave the politicians a more direct incentive to be nice with the taxes.
No question, the era where the individual can determine what they do with their hardware needs to end. If you're using power without justification, you're either burning the planet or using energy that could stop others burning the planet. A higher authority is needed and, for cryptocurrency, their answer should always be NO.
Well done NY. Banning cryptomining would have been better, but it's a step in the good direction.
I guess the reason why our dear leaders in Europe didn't make the move is they get their fair share of the scam business.
For Kentucky leaders, as they want to attract the scum, a suggestion: make ransomware legal as long as the attacks come from KY. I'm sure it will develop the IT industry there, bring a lot of jobs and money.
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