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Sustainability-In-Tech : 1st U.S. Moratorium On Crypto-Mining Passed

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New York state lawmakers have passed a two-year ban on energy-hungry ‘proof-of-work’ crypto mining that uses carbon-based fossil fuel power plants.

New York state lawmakers have passed a two-year ban on energy-hungry ‘proof-of-work’ crypto mining that uses carbon-based fossil fuel power plants.

Energy-Hungry Crypto-Mining

One of the big environmental challenges of cryptocurrency mining is that it requires a large amount of power. For example, Bitcoin “mining” uses specialised Bitcoin computers that are constantly powered on and connected to the cryptocurrency network to verify transactions (sending and receiving of the Bitcoin cryptocurrency). This verification is achieved by the computers solving puzzles to prevent fraud and to win small amounts of Bitcoin.

Researchers from Cambridge recently highlighted how Bitcoin mining consumes a massive 21.36 terawatt-hours (TWh) a year, meaning that if Bitcoin were a country, its energy (electricity) consumption would be ranked above Argentina and the energy could power all the kettles in the UK for 27 years.

Using Former Power Plants

The problem in upstate New York, which the new two-year moratorium has been introduced to stop, is that the area has become an attractive destination for Bitcoin-mining companies due to the availability of former power plants and manufacturing sites with unused electrical infrastructure.

The idea of passing the moratorium is, therefore, to prevent old fossil fuel power plants in New York from being given a second life by private crypto-mining companies as this would create more carbon pollution and make it more difficult for the area to meet climate targets.

Proof-Of Work Mining

The new law is particularly targeted at the ‘proof-of-work’ mechanism of verifying new transactions on the blockchain and make new tokens in crypto-mining. Proof-of-work tokens include Bitcoin, Ethereum, and Dogecoin and proof-of-work mining requires a large amount of energy.


The new temporary ban does, however, exempt businesses that have already secured or applied for, or have renewed air permits, as well as most of the facilities in the state that use power from the electric grid. Renewable energy proof-of-work crypto mining businesses will also still be allowed to operate.


Although the move will please environmental campaigners it has been criticised for its potential to deter investment in New York State and cause crypto-mining businesses to simply cluster in other states where there is solar, wind, hydro and other sources of clean energy, e.g. Texas, Tennessee, and Washington State.

What Does This Mean For Your Organisation?

This story illustrates how, although cryptocurrencies are virtual, their mining (particularly with the ‘proof-of-work’ mechanism) require vast amounts of power. This not only makes them a threat to the environment where fossil-fuelled power is used but can drive some companies to apparently put their own profits before climate change targets and negative effects on the environment. Also, as the details of the new moratorium show, it can lead businesses to re-open old fossil fuel power plants or take other measures to meet their power requirements. For example, in January 2021 in the UK West Midlands, police closed down a warehouse that had been converted to an operation to illegally supply large quantities of electricity for Bitcoin mining. The alternative mechanism to proof-of-work is ‘proof-of-state’ which is more energy efficient. Although crypto-mining companies in the US may be deterred from areas where these types of laws are passed and those areas may suffer the lack of investment, at least it may drive them to areas using clean energy sources thereby having a lesser impact on the environment.