This month, Plattsburgh, a small city in New York State put an 18-month restriction on cryptocurrency mining operations in the area.
First of all, to answer my question of why they have introduced this ban, we need to figure out why cryptocurrency mining is so popular in Plattsburgh in the first place.
Plattsburgh is well known in the United States for its cheap energy rates, just to give you some context, according to energylocal.com the following statistics apply for the Plattsburgh area.
The average commercial electricity rate in Plattsburgh is $0.41/kWh.
The average residential electricity rate in Plattsburgh is $0.44/kWh.
The average industrial electricity rate in Plattsburgh is $0.26/kWh.
That works out as 59%, 63% and 61% less than the national average for the same sorts of power use respectively.
Therefore, it’s wise to conclude that Plattsburgh has incredibly valuable electricity rates, something important to consider if you are planning on carrying out cryptocurrency mining.
The reason these rates are so cheap are essentially because of the Moses-Saunders Power Dam, situated on the Saint Lawrence River. The dam provides direct power to Plattsburgh through energy harvested from the power of water, this is a very cost effective and efficient method for generating power, it’s also a form of renewable, clean energy so has other incentives following its low costs.
Now, local reports have surfaced in Plattsburgh stating that cryptocurrency mining from just one firm, Coinmint used around 10% of the cities power, generated from the dam, in the first 2 months of this year. This is quite a startling statistic so its no wonder the governors have decided to implement this ban.
However, you need to see the bigger picture here, this takes me right back to my initial question, why did Plattsburgh ban Crypto Mining? Ok so they are worried that perhaps the mining is using their power up at an alarming rate, however, this is cleanly generated power. By banning crypto mining here, the governors of Plattsburgh are just going to drive mining companies away into areas that use fossil fuels to generate power, dramatically increasing the carbon footprint of the cryptocurrency mining industry in the process.
The sensible thing to do is not to ban mining, but to actually encourage it in the area, maybe at an increased cost. Taxes generated could go back into providing a bigger energy supply for the citizens of Plattsburgh, or could go back into making the dam more efficient?
By pushing the mining away, the opportunity for crypto miners to use clean energy to power their processors is reduced, meaning that in the grand scheme of things, the environmental impact the industry is having on the planet is only going to get worse.
By sharing green energy, perhaps for financial gain, areas such as Plattsburgh can not only benefit in the short term, but by allowing cryptocurrency mining they can have a very beneficial impact on the rest of the planet over time.