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Why New York State Is Experiencing a Bitcoin Boom

Why New York State Is Experiencing a Bitcoin Boom
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Why New York State Is Experiencing a Bitcoin Boom

Why New York State Is Experiencing a Bitcoin Boom

Bitcoin mining is set to begin northeast of Niagara Falls this month on the site of the last working coal plant in New York State.

Across the state, the former aluminum plant in Massena, already one of the largest cryptocurrency sites in the United States, is expanding.

And in Ovego, the metal-recycling mogul with 11.3 million Instagram followers is doing a minor start-up with computer banks in a shipping container next to a scrapyard.

The rising value of Bitcoin may be Wall Street’s investment talk, but a few hours north, in the upper New York, there is talk of those companies creating digital currencies with computer farms of all types and sizes. Constant whispering from the transaction.

In just a few years, parts of northern and western New York have become the largest bitcoin producers in the country. The prospectus in this Digital Gold Rush requires a lot of cheap electricity to run thousands of energy-gazelle computer rigs.

This area – cheap hydropower and a lot of closed power projects and old factories – was perfect for bitcoin mining. The abandoned infrastructure, often with an existing connection to the power grid, can be easily converted to bitcoin mining.

Companies say they are boosting the local economy by bringing the industry back and creating a crypto vanguard north of New York City, where bitcoin stocks, albeit unexpectedly, reached record highs on Wall Street this year and the incoming mayor, Eric Adams, imagines. Cryptocurrency hub.

But the increase in activity has also led to a growing outcry for bitcoin about the amount of electricity and pollution involved in mining. Globally, cryptocurrency mining consumes more electricity each year than Argentina. China, which once accounted for two-thirds of all crypto mining, banned the practice this year to achieve carbon-reduction targets and moved some miners to New York.

As a result, environmental groups say the Wild West-style scramble, along with a lack of restrictions on bitcoin mining, threatens the state’s own emission-reduction targets, which call for more renewable energy and faster reductions in fossil-fuel emissions.

Bitcoin mining companies usually only require basic building or planning permits from local governments, many of which reduce the number of industrial cities they are looking for any new business-tax revenue they could generate.

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In the Finger Lakes region, the former coal plant on the ancient Seneca Lake has been converted into a greenhouse-generation natural gas-burning plant, which now powers bitcoin mining on site. Near Buffalo, a bitcoin company is looking for cheap electricity by taking over a part-time gas-fired power plant and restarting it for 24-hour use.

Increased greenhouse gas emissions will accelerate the effects of climate change, say environmental groups such as EarthJustice and the Sierra Club, which are overseeing many of New York’s oldest natural-gas plants that could easily be reused as bitcoin mining operations.

There have also been complaints of plants buying renewable energy from the grid. While a large bitcoin mining project could use more electricity than most cities in the state, environmentalists warn that other areas of crypto mining will rely on fossil fuel energy.

The abundance of hydroelectric power and other types of renewable energy helps large mining companies to promote themselves as environmentally conscious.

The plant, which opens in Somerset, NY, northeast of Niagara Falls this month, is part of the Bitcoin mining company’s $ 550 million project, Teravolf. The project also includes the proposed 150-megawatt data center at the former coal project on Kayuga Lake in Finger Lake.

Paul Pragar, chief executive of Terravolf, said the Somerset plant would use the hydroelectric energy saved from the waterfall, which would otherwise be difficult to send to other locations due to grid congestion.

And since the plant state will comply with environmental regulations and not pollute the air, he said, “we see the regulations as a really good thing.”

But despite the fact that companies involved in many aspects of Bitcoin activity, including currency trading, need to be licensed, New York does not impose any restrictions on mining.

Some municipalities, including Plattsburgh and Massena, two initial bitcoin-mining destinations near the Canadian border, have suspended the practice.

The ban has since been lifted, but some lawmakers want to make New York one of the first states to ban certain types of bitcoin mining. In June, the state Senate passed a bill that would have imposed a statewide moratorium on some fossil-fuel-powered mines; The law died in the Legislature.

“It has become easier for these companies to fly under the radar because the entire industry is confused at first to understand,” Assemblywoman Anna R. Kells, a Democrat representing the Ithaca constituency and sponsoring the bill, said. “Non-federal or statewide regulation of greenhouse gas emissions and their effects on water and air is very new to the industry.” (Ms. Kellys said she plans to revive the bill next year.)

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For the same reason, some environmental activists have called on the government to issue an executive order to Kathy Hochul to ban some crypto mining.

In 2017, the closed coal plant on Seneca Lake was converted by Greenidge into a natural gas-burning plant, which was then owned by Atlas Holdings, a private equity firm with a 6 billion holding. Greenidge now advertises itself as the first company to trade publicly with a bitcoin mine integrated as part of a power plant. The plant has a capacity of 106 MW, which is enough to generate enough electricity to power about 85,000 households.

The plant is “building a new economic engine that will make New York a part of the world’s digital future,” Greenwich CEO Dale Irwin said in a statement.

But the plant’s greenhouse gas emissions have increased with its mining activities, and so there is opposition from some locals who say the plant poses an environmental threat to these rural vineyards, farm stands, ancient waterways and world-class ghats.

A local blogger reported on the permission to remove more than 100 million gallons of water a day from Lake Seneca in Greenidge and then return it to a warmer level in a nearby trout stream tributary.

Mr Irwin said there was no risk of outflow and the lake temperature, measured daily by independent sources, was not affected.

And although plant emissions have increased since 2019, he said, they are still well below the state-permit level. The plant poses no threat to the environment, he said.

Greenidge is applying to the state for renewal of air emission permits, and opponents see an opportunity for the state to curb the company’s expansion.

Elected officials, including U.S. Senators Kirsten Gillibrand and Chuck Schumer, have asked state and federal regulators to carefully review the plant’s application.

As political and public pressure mounts, state Environmental Protection Commissioner Basil Segos, Wrote on Twitter In September, “Greenwich did not comply with NY’s weather laws.” He appealed to the residents to participate in the public comment period regarding permit renewal.

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To build several structures at the plant, Greenidge obtained local planning board approval from the city of Tori in April.

Patrick H. Flynn, 79, a farmer and Tory town supervisor, called Greenidge a boon for the region and said renewable energy was “overrated.”

“We can’t restrict business,” he said. “Even if they make bitcoin, it’s no different than raising cattle or pigs or chickens.”

Yvonne Taylor, vice president of the Seneca Lake Guardian, a local conservation group, accused state officials of failing to publicize the environment without requiring an environmental review before approving Greenwich and requiring local governments to do so.

“It can’t be a city-to-city fight,” said Ms. Taylor, a speech pathologist whose family has lived on Lake Seneca for generations. “We need the governor to step in. If she wants to be a climate champion, she must accept a moratorium on this type of energy-intensive cryptocurrency, otherwise we will never be able to achieve our climate goal.”

Greenwich’s case is no different. Digichost, a Bitcoin company in Buffalo that is reviving a gas-fired power plant, has faced criticism that increased air emissions will affect areas affected by industrial poisoning. Among them is the Love Canal, a neighborhood near Niagara Falls that has become infamous for its toxic landfills that have harmed hundreds of residents.

But local officials overwhelmingly approved Digihost’s plans because the new operation’s environmental toll seemed lower than the company’s expected benefits, including a नोक 1 million annual fee for municipal water to cool new jobs and plants, Robert Pecoraro said. , President of the Common Council in North Tonwanda, where the plant is located.

Digihost officials say the plant will operate within state emissions limits, begin migrating to more renewable energy sources over time, feed the grid as needed, and help western New York survive in the tech industry while creating at least 30 permanent jobs.

Mr. Pecororo recently saw workers standing outside a gas plant building a large shed to house a new server. He said he did not understand the opposition to Digihost and the financial implications it would bring to the sector.

He said, “There is a lot of industry left over in the last few years. “And here we are trying to bring Digihost and people are arguing with us over it.”


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