While a bill to impose a moratorium on companies wishing to mine cryptocurrencies in New York was recently passed, it is far from unanimous. For Vitalik Buterin, a sensible solution would be to propose appropriate taxation rather than blockade.
New York mining bill under debate
Last Friday, a bill to impose a 2-year moratorium on new cryptocurrency miners in New York State passed the Senate. The bill was passed by a vote of 36 to 27 in the Senate, in part to more accurately assess the environmental impact of mining.
In concrete terms, if the bill were to be adopted, any company wishing to start a cryptocurrency mining activity would have to wait 2 years for its future ecological impact to be calculated.
Indeed, the Proof of Work (PoW) method on which Bitcoin (BTC) and Ethereum (ETH) are based is often blamed for its high energy consumption, which implies a significant carbon emission if not derived from sustainable energy.
However, the adoption of the moratorium is far from unanimous. According to members of the crypto community, such as Jake Chervinsky, communications director at the Blockchain Association, such a project will only cause an exodus of miners to another more favourable geographical area.
1/ As the anti-bitcoin wing of the NY political establishment takes a victory lap over the passage of its mining ban, remember:
It will not help reduce carbon emissions by a single ounce.
All it does is push miners to build in other places where NY has no influence over them.
– Jake Chervinsky (@jchervinsky) June 5, 2022
Through his thread, he explains that this is a political measure to ease his conscience:
“Unfortunately, this is nothing more than a feel-good performance policy. It gives a small contingent of NY environmentalists an excuse to blame others for the perceived (but not real) problem of Bitcoin’s energy consumption, but that’s about it. At best, it has no impact on emissions. “
Jake Chervinsky hopes here that the Governor of New York, on whom the bill’s purpose rests, will veto it “for the good of New York”. He believes that the bill’s passage would be a serious political mistake by the world’s financial capital.
Opposition also within the political world
Bruce Fenton, the former executive director of the Bitcoin Foundation and now a candidate for New Hampshire state senator, said it should not be up to a government to make decisions on the issue:
No government has the right to tell you what software to use. The code is freedom of expression. “
Vitalik Buterin, the co-founder of Ethereum, actually agreed with this statement. For him, the real solution would be to set up a reasoned and proportional taxation of miners’ carbon dioxide emissions, in order, for example, to pay it back to the poorest people.
Ultimately I agree with this (that is, I oppose banning PoW). The government picking and choosing which specific applications are an okay use of electricity or not is a bad idea. Better to just implement carbon pricing, and use some of the revenues to compensate low-income users. https://t.co/NnBzmv5mYz
– vitalik.eth (@VitalikButerin) June 4, 2022
He does not, however, deny the high energy consumption of mining and its current status quo, which must, pending appropriate solutions, imply moral responsibility.
On the contrary, Laetitia James, the New York Attorney General, has shown her opposition to cryptocurrencies far beyond mining. In particular, she said that investors had recently “lost billions of dollars”:
“Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money into risky cryptocurrency investments that can generate more anxiety than fortune. “
So the case is far from over, but whatever the outcome, the age-old debate over the ecological footprint of mining must be answered appropriately.
