New York Banned Cryptocurrency Mining for Two Years

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The measure applies to a part of the process and will seek to mitigate the impact of the activity on the environment

New York banned cryptocurrency mining for two years

New York banned cryptocurrency mining for two years (Facebook/@sspslp )

The state of New York is the first to ban cryptocurrency mining. The measure was announced on Tuesday and will be in force for two years and applies to the party suing excessive energy consumption.

The local governor, Democrat Kathy Hochul, enacted the text this Tuesday, which was voted by the state parliament last June, and will enter into force immediately.

“I will ensure that New York remains the center of financial innovation while taking important steps to prioritize protecting our environment,” Hochul said in a message explaining his position.

New York banned cryptocurrency mining for two years

Kathy Hochul promulgated the text this Tuesday and it will take effect immediately (REUTERS)

The regulation focuses on the moment of authentication with “proof of work”, by means of which transactions are validated in the chain of blocks and which is used in the production of various currencies -among them, the famous Bitcoin-.

This method consists of a series of complex computer calculations that are executed as quickly as possible, in order to receive one or more units of these virtual currencies.

The arguments of the authorities rest on the fact that it is of a an intensive process in the consumption of electricity -in some cases, fossil fuels-, which has generated concern about theenvironmental impact of this sector, which is growing in the state.

As a result of this, new licenses were suspended and renewals for mining companies that use fossil fuels were paralyzed, so only those based on renewable energy will remain active< /b>.

New York banned cryptocurrency mining for two years

Authentication with "work bridge" has generated concern about the environmental impact of this sector in the state

In recent years, New York has become the preferred destination for several specialized companies, which seized old power plants to carry out their operations.

According to the specialized firm Digiconomist, mining or creating one bitcoin requires about 1,150 kilowatt hours, which is equivalent to the average consumption of an American household for 40 days.

After two years, the New York authorities will assess a moratorium on the measure based on an environmental impact assessment of the activity in the territory.

Groups in favor of the resolution argued that it is a good initiative that will allow the state to move towards its climate goals. However, some opponents justified the activity by explaining that it contributes to job creation.

New York banned cryptocurrency mining for two years

Mine or create a bitcoin requires about 1,150 kilowatt hours, which is equivalent to the average consumption of an American household for 40 days

Although it is the first state in the country to make this decision, the United States does not is the first in the world to ban cryptocurrency mining. Several nations have already moved forward with this provision.

China was, by far, the world leader in the creation of virtual currencies until June 2021, when he ceased the practice. This illegalization of the measure caused an exodus that greatly benefited the United States, which is self-sufficient in energy matters. Since then, it has become the world's leading producer of cryptocurrencies.

For its part, Kosovo, in Europe, also made progress with this measure in January 2022 when the country was experiencing power supply problems and suffered recurring cuts.

(With information from AFP and EFE)< /p>

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