Last week, New York Governor Kathy Hochul signed new regulations prohibiting certain cryptocurrency mining operations. The signed moratorium bans the use of any carbon-based power sources for Proof-of-Work (PoW) mining facilities within the state for a two-year period. Mining companies using 100% renewable energy are exempt from this new law.
Governor Hochul stated that this initiative aims to curb the state’s carbon footprint by shutting down miners relying on fossil fuel-generated electricity. Several major environmental activist groups and NGOs praised the governor’s decision.
Environmental Backing for the Ban
The U.S. branch of Greenpeace, one of the world’s largest environmental nonprofits, commended Hochul’s move. The organization argues that Bitcoin miners’ energy-intensive operations have been overlooked and unchecked for too long. For years, major Bitcoin mining facilities have consumed more energy than some small countries. Greenpeace emphasizes that companies and the public must acknowledge and address the environmental costs of crypto mining.
Gigi Singh, Senior Communications Specialist at Greenpeace USA, noted:
"We applaud Governor Hochul’s use of a moratorium to address this issue. Last year, China banned crypto mining, leading many miners to relocate to other countries, including the U.S. Such pauses create timeouts to prevent worsening problems while determining next steps. It’s time for the Bitcoin community—including companies like Fidelity Investments and Mastercard—to leverage this two-year halt to transition Bitcoin’s code away from energy-intensive PoW mining, permanently mitigating climate concerns."
The Future of Cryptocurrency Mining
The Proof-of-Work consensus mechanism has long faced scrutiny for its high electricity demands. In 2020 alone, Bitcoin mining consumed 75.4 terawatt-hours annually—more energy than Austria’s entire national usage. Most facilities draw power from fossil fuel plants. While some miners use 100% renewable energy, the higher cost of sustainable sources leads many to opt for cheaper fossil fuel alternatives.
This extreme energy consumption significantly impacts climate change. Consequently, more blockchains are transitioning to the sustainable and cost-efficient Proof-of-Stake (PoS) model. Compared to PoW, PoS reduces energy usage by 99%. Ethereum’s recent shift to PoS drastically minimized its mining operations.
Currently, Bitcoin and Dogecoin remain the largest PoW-based blockchains. Other major cryptocurrencies using mining-based models include Litecoin, Monero, and Bitcoin Cash. With rising environmental concerns and regulations, PoW’s prevalence in the crypto industry is likely to decline. Major PoW users may follow Ethereum’s lead in adopting PoS.
FAQs
1. Why did New York ban PoW mining?
New York aims to reduce its carbon footprint by prohibiting energy-intensive PoW mining reliant on fossil fuels. The moratorium exempts miners using 100% renewable energy.
2. How does Proof-of-Stake (PoS) differ from Proof-of-Work (PoW)?
PoS eliminates energy-heavy mining by validating transactions through staked cryptocurrency holdings, slashing energy use by 99% compared to PoW.
3. Which major cryptocurrencies still use PoW?
Bitcoin, Dogecoin, Litecoin, Monero, and Bitcoin Cash currently operate on PoW.
4. Could Ethereum’s shift to PoS influence other blockchains?
Yes—Ethereum’s transition sets a precedent for sustainability, pressuring other PoW blockchains to adopt eco-friendly alternatives.
5. What’s the environmental impact of Bitcoin mining?
In 2020, Bitcoin mining consumed more energy than Austria, largely sourced from fossil fuels, exacerbating climate change.
6. How long is New York’s mining ban?
The moratorium lasts two years, providing time to assess long-term solutions for sustainable crypto operations.