Last week, the NY State Assembly passed Assembly Bill A7389C, a two-year moratorium on a subset of new Bitcoin mining operations in the state. A lot of news has been circulating about the bill, some of it is accurate. We’re here to break down exactly what the bill does (and doesn’t) do, and provide Soluna’s take on the ongoing debate.
Notably, this bill is not a ban on mining in New York.
Nor is it even a ban on new mining ventures in the state. The moratorium is specifically aimed at facilities that utilize carbon-based fuel and thus contribute directly to carbon emissions. As Assemblymember Kelles, the main sponsor of the bill noted: “[This bill] only specifically [applies] to power plants, of which we have about 30 in upstate and about 19 in downstate.”
It targets only fossil fuel mining operations.
The bill is also not retroactive, meaning that facilities operating at the same level they’ve been operating at will be unaffected by it.
To summarize, the bill would prevent:
- The new development of mining facilities that are carbon-based AND use the Proof of Work (PoW) protocol across the state
- The expansion in energy usage or consumption of existing projects
The bill would not prevent:
- The new development of mining facilities that do not utilize a carbon-based fuel and/or don’t employ PoW protocol
- The continued operation of existing facilities (even those that utilize a carbon-based fuel) as long as those facilities don’t expand their energy usage or consumption
A few thoughts.
First, banning the new development of carbon-based mining operations is a positive development. We think that government regulation of the mining industry is not inherently a bad thing. Regulation done right can dissuade bad actors, ultimately benefiting the health of the mining industry (not to mention the Earth) in the long run.
Still, the narrative is important, and singling out Bitcoin mining from other energy-intensive industries continues to push the already prevalent narrative that mining is unusually bad for the environment. This isn’t true.
Yes, Bitcoin mining is an energy-intensive process. Energy-intensive does not equal lots of carbon emissions. In fact, mining can be a great catalyst for the renewable sector, as we are working to prove at Soluna.
This bill needs to be re-framed not as a ‘moratorium on mining’ but as a moratorium on fossil fuel-based mining.
New York is not discouraging mining, per se; in fact, it is encouraging mining using renewable energy. We spoke to someone close to the process, and they explained that the bill in large part is aimed at preventing power plants from using Bitcoin mining as a way to prolong their lifespan or private companies investing in repowering old plants from using mining as a catalyst.
Calling the bill a blanket moratorium on mining when really it is focused on environmental protection only serves to reinforce the narrative that mining is dirty and fringe.
For forward-thinking companies building sustainable operations, this bill should be seen as a boon, not as a nail in the coffin. That’s how we see it.
AB A7389C still has to pass a vote in the New York State Senate and be signed into law by Governor Hochul. In the meantime, we’d love to see more legislation proposed by the Assembly that will examine the use of fossil fuels in other energy-intensive sectors.