Government Dictates Valid Use of Power New York's Mining Ban

The co-founder of ETH Vitalik Buterin and Coin Metrics author Nic Carter rendered conflicting arguments to New York's mining ban. The main opposing view comes from the government dictating what is an adequate use of the states electricity.


Cater tweeted

"Will red states respond and ban computation taking place in their borders used for pornography, Netflix, and Disney? Is a world where the state itself decrees what is an acceptable use of electricity or not one you really want to live in?"


"So NY is now regulating the contents of the data center and has banned a kind of computation (sha-256 hash functions). They’re directly controlling what constitutes a valid use of power"


"The New York sha-256 ban might seem a little more credible if they hadn’t closed down Indian Point nuclear plant (10% of state generation) and replaced it with new natural gas plants last year. Climate warriors they are not."



Possible Ramifications

Carter is simply pointing out that the government is now dictating what type of actions or what type of work can be preformed inside of a data center. This could end up creating many issues for IT departments as some of the processes or servers that they could be hosting, based off this now precedent, could be considered not adequate use of the states electricity. Carter is also pointing out that there are many non-profit generating uses of power or less productive uses of power that are allowed.


The U.S. Senate candidate Fenton replied to this tweet objecting to New York's choice to ban SHA-256 stating: "No government has the right to tell you what software to run. Code is speech."


Environmental impact of BTC Mining

Mining BTC consumes roughly 110 terawatt-hours of energy each year. This does have a direct impact on the environment and has been a hot topic lately, with many public figures discussing this topic. Vitalik has decided to switch Ethereum from Pow to a more sustainable PoS because of this and many other factors. While the well known Dodge coin whale, Elon Musk, has suggested miners use sustainable energy sources for Bitcoin mining.


Many in the Bitcoin mining industry have taken the path Elon Musk suggested in the last year. We know this is true because the industry's sustainable energy usage increased about 59%. This is a very smart investment for miners, even smaller ones as depending on where you live excess power can be sold for more monthly income.


Currently the U.S. contributes to approximately 38% of the average monthly hashrate for BTC mining. You would be shocked to know that about 10% of that hash rate actually comes from New York every month. While if this ban included everyone, instead of just data centers, it may help the environment. However most of the users mining in these data centers will just get up and running in another state. This is just a mild inconvenience for them as they will have to move locations but luckily BTC is one of the easer farms to migrate further away from home. This is a fact as all BTC miners are ASICS and require little to not maintenance.



New York is now concerned about the environment

The New York Senate passed this bull because of the environmental concerns, more than likely voiced by the community over the past few years. They had argued that the greenhouse gas emissions produced from crypto mining would irreparably harm their compliance with the Climate Leadership and Community Protection Act.


Vitalik responded to this in a tweet saying:

"Ultimately I agree with this (that is, I oppose banning PoW). The government picking and choosing which specific applications are an okay use of electricity or not is a bade idea....."


With ETH moving to PoS soon because of the environmental impact, it is interesting to see Vitalik respond in this way. However with PoS you do need to run Nodes, and more than likely these nodes would run inside of data centers. This ban indirectly poses a threat to the future of ETH in this way, if it turns out the government decides these nodes are using too much power they could ban them. Nonetheless it is nice to see Vitalik respond in this way and support PoW.