The New York Senate has passed a moratorium prohibiting carbon-based cryptocurrency mining.

News Sand DC
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The New York Senate recently enacted legislation prohibiting crypto mining firms from using carbon-based fuel to power their operations.

The measure explicitly targets proof-of-work mining, which is one of the two most common processes used by cryptocurrencies to verify new transactions on the blockchain and create new tokens, but it consumes a lot of energy.

Bitcoin, Ethereum, and Dogecoin are some of the most popular proof-of-work tokens.

Proof-of-stake, on the other hand, is when cryptocurrencies, such as ETH2.0 or Avalanche, employ staking to achieve the same result with less energy and is regarded to be more efficient for scaling than proof-of-work.

According to the measure, lawmakers are attempting to reduce the state's carbon footprint and "mitigate the current and future impacts of climate change."

"Cryptocurrency mining businesses that use proof-of-work authentication methods to confirm blockchain transactions are a growing industry in New York," the report claimed. Continued operations will "significantly increase the quantity of energy consumed" in the state, according to the report.

If it succeeds, any proof-of-work mining in the state that relies on fossil fuels will be prohibited for two years. Businesses that use 100 percent renewable energy for proof-of-work mining will, however, continue to be permitted to operate.

“Ultimately, this bill will hurt New York more than it will help, as these miners will increasingly cluster in states such as Texas, Tennessee, Washington State, and elsewhere that provide solar, wind, hydro, and other sources of clean energy,” said Steven McClurg, co-founder, and CIO of Valkyrie Investments, which oversees WGMI, the largest U.S.-based Bitcoin miners ETF.

The Senate voted 36-27 in favor of the bill after passing it through the New York State Assembly in April. It now moves to the desk of New York Governor Kathy Hochul, who could sign or veto the legislation.

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