Local regulators are taking up measures to counter the negative impact of digital asset mining on the environment.
US Senator Kevin Parker proposed to placed restrictions on cryptocurrency mining in New York for a period of three years – pending the provision of the examination results, which should determine the level of environmental impact of digital assets mining. Bill that incluides this initiative entered the State Senate Environment Committee.
According to Kevin Parker, cryptocurrency mining should be prohibited if its consequences negatively affect the environment. An exception can be made by companies whose activities related to the extraction of digital assets do not harm the environment.
If the bill is passed, state regulators will be able to start auditing mining companies. In particular, the regulatory authorities will be allowed to assess the impact of organizations’ activities on the environment.
Also, regulators will be given the opportunity to impose sanctions against companies whose activities, in their opinion, do not meet the state’s plans to improve the environment. We will remind, earlier the regulators of New York approved a scheme to reduce greenhouse gas emissions by 70% by 2030.
Kevin Parker drew up the bill amid rising miner activity in the state. Many market participants took notice of idle coal-fired power plants near New York. Due to the resumption of their work, the level of harmful emissions has significantly increased.
For example, Greenidge Generation company used this scheme of work. Its mining business in the state was so profitable that representatives of the organization announced plans for further expansion.
Also, Kevin Parker was interested in the legality of connecting mining companies to power plants, the work of which could provide the necessary amount of electricity to the residents of the state.
Researchers have been talking about the dangers of cryptocurrency mining for several years now. Recall that the most capitalized digital asset is Bitcoin. It accounts for most of the mining market.
To mine BTC, you need computing power, which miners get from computer installations and special equipment – ASICs. Such devices consume a lot of electricity, the production of which negatively affects the environment. Also, mining harms the environment due to the heat transfer of equipment.
As of early April 2021, China is the main hub for Bitcoin mining. More than 71% of the total amount of computing power (hashrate) is concentrated in the country, which are aimed at mining BTC.According to Cambridge Centre for Alternative Finance (CCAF) only 39% of the electricity that miners send to mine bitcoin comes from renewable sources from October 2020.
Digiconomist analysts, in turn, calculated that the total amount of electricity spent on the extraction of all cryptocurrencies based on the PoW algorithm, including Bitcoin, is comparable to the costs of an entire country – Columbia.
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