Cryptocurrency mining requires a whole lot of electricity, which is why miners love New York. Here, electricity is cheap and the flow is fast which makes it ideal for crypto miners.
Unfortunately, mining is depleting 10 percent of New York’s electricity, and the city council will not have it.
On Thursday, all commercial crypto mining in Plattsburg, New York stopped (and will be halted for the next 18 months) as a result of a voltage shock from its own by its city council. On estimate, Plattsburg gets 104 megawatt-hours of electric power every month. However, if the city exceeds this, they will have to purchase electricity on the open market at a significant price.
Data mining requires so much power because it involves the process of running mathematical equations on high-powered computers in order to verify transactions. The individuals or business who run these processes gets paid in cryptocurrency.
That is why crypto miners often flock to small towns with a cheap power to take advantage.
However, this often has negative consequences on the towns’ or cities’ electric consumption. For a price of 2 cents/kWh, miners took advantage and used way more than ever thought possible. For instance, Coinmint – the city’s largest mining operation – used nearly 10% of the city’s power in January and February.
Consequently, the city’s electric bills rose to as high as $200!
As a result, local lawmakers enacted a law that would favor both miners and the city – the 18-month moratorium. Any mining company that breaks the law will be fined up to 100 dollars for each day they violate it.
Nonetheless, miners are willing to pay particularly in the cold season. “It would never cost the [Plattsburgh] citizens any more money to let more miners come in, because [they] are willing to pay for those overages,” said Tom Pillsworth, a local citizen, and partner at the second largest Bitcoin mine in the city.
One question remains: Does crypto mining provide any economic benefits to the city? Many hold different opinions regarding this matter.