Plattsburgh, New York, has become the first city in the US to ban cryptocurrency mining in the city for the next 18 months.The city council unanimously voted to impose the ban at a council meeting last night, and the mayor's office states that the purpose of the law is to consider "regulations before commercial cryptocurrency mining operations results in irreversible change to the character and direction of the city."
Plattsburgh mayor Colin Read told Motherboard that the city has the cheapest rates of electricity in the world. Residents pay about 4.5 cents per kilowatt-hour, compared to 10 cents the rest of the country pays on average. Plattsburgh also has an incentive for industrial enterprises, which only pay 2 cents per kilowatt-hour. This has led cryptocurrency miners to use the city as a base for their operations because their profits rely on cheap electricity, and mining takes up an astronomical amount of energy. Motherboard notes that Coinmint operates the biggest Bitcoin mining operation in Plattsburgh, and it used about 10 percent of the city's total power budget in January and February.
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Mayor Read proposed the moratorium after residents complained about the jump in their power bills earlier this month. "I've been hearing a lot of complaints that electric bills have gone up by $100 or $200," Read told Motherboard. "You can understand why people are upset." Plattsburgh has an allotment of 104 megawatt-hours of electricity per month. When it went over this allotment in January, the city had to buy more expensive electricity from the open market leading to the price rises. The mayor's office states the new law is to also protect Plattsburgh's natural, historic, cultural, and electrical resources as well as the health and well-being of its residents.
In simplest terms, cryptocurrency mining refers to the computational process of solving mathematical problems in order to secure the blockchain and extract the digital tokens. There are a limited amount of tokens, and the more a cryptocurrency is mined, the more difficult those mathematical problems become. This means more sophisticated computers are needed to power the mining activity. Mining is so huge now that it's also hurting PC gamers by pushing up the prices of graphics cards, while companies like Samsung are now making chips designed just for cryptocurrency mining.
The Plattsburgh law will take effect once it has been approved by Read and filed with the New York secretary of state. Officials will also work with residents and local cryptocurrency miners over the next 18 months on the power issues.