Last week, New York Governor Kathy Hochul signed new regulations to ban certain crypto mining operations. The signed moratorium bans proof-of-work mining facilities that use any carbon-based power source for the new two years. Mining companies that use 100% renewable energy are exempt from this new law.
The governor stated that this initiative will curb the state’s carbon footprints by shutting down miners that use electricity from fossil fuels. Several major environmental activist groups and NGOs have applauded this decision by the governor.
Greenpeace USA, one of the largest environmental nonprofits in the world has applauded this decision by Hochul. The organization believes that the energy-intensive operations of bitcoin miners have gone unnoticed and unchecked for too long. Over the years, some of the major bitcoin mining facilities have consumed more energy than some small countries. Greenpeace emphasized that companies and the general public should acknowledge and take responsibility for the environmental cost of crypto mining.
“We also applaud Gov. Hochul’s use of a moratorium to address this problem. Last year, China banned crypto mining, and as a result, many of the “miners” moved to other countries, including the United States. Moratoriums like this one create a time-out to stop a problem from getting worse while figuring out what to do next. It is time for the Bitcoin community – including companies like Fidelity Investments and Mastercard – to use this two-year moratorium to change Bitcoin’s code away from energy-intensive Proof of Work “mining” to fix its growing climate problem for good,”said Gigi Singh, senior Communications Specialist at Greenpeace USA.
What is the future of crypto mining?
The proof-of-work consensus mechanism has long been scrutinized for its intense power requirements. In 2020 alone, bitcoin mining facilities used 75.4 TWh/yr of electricity, which is higher than the energy consumed by the entire country of Austria. These facilities draw energy from power plants that use fossil fuels. While some miners use 100% renewable electricity, the increased cost of this sustainable power supply influences most miners to go for the cheaper fossil fuel alternative.
This extreme consumption of energy and fossil fuel is having a significant impact on climate change. As a reason, more and more blockchains are moving to the more sustainable and cost-effective proof-of-stake model. The PoS model facilitates blockchain functions with 99% less energy required compared to PoW. Ethereum has also shifted to the PoS model recently, significantly reducing the blockchain’s mining operations.
Currently, Bitcoin and Dogecoin are two of the biggest blockchains using the PoS model. Other major cryptocurrencies to use this mining-based model include Litecoin, Monero, and Bitcoin Cash. With environmental concerns and regulations constantly increasing, it is evident that PoW will become less prevalent in the crypto industry. We might see other major PoW users transition to a sustainable PoS model like Ethereum.