As cryptocurrency becomes more popular in the world, it’s also creating problems for places where miners are setting up. Turns out that the town of Plattsburgh, New York, has become the first in the US to ban cryptocurrency mining. The city council apparently voted unanimously to impose the ban at a counsel meeting last night. The mayor’s office states that the purpose of the law is to consider “regulations before commercial cryptocurrency mining operations results in irreversible change to the character and direction of the city.”
It’s worth mentioning that this isn’t a full outright ban, at least not yet anyways. It doesn’t affect miners that are currently operating in the city, just new ones that are looking to set up in the city. In addition, this ban is only in place for 18 months.
So, why Plattsburgh, New York? The reason is because the small town has the “cheapest electricity in the world,” as Mayor Colin Read told Motherboard. Residents pay about 4.5 cents per kilowatt-hour, which compared to 10 cents for the rest of the country (on average), is very cheap. Plattsburgh also provides incentive for industrial enterprises, which only pay 2 cents per kilowatt-hour. Because of this, cryptocurrency miners have found the town to be a goldmine due to cheap electricity and their profits rely on that (mining takes massive amounts of energy). Motherboard has noted that Coinmint operates in the biggest Bitcoin mining operation in Plattsburgh, and apparently used about 10 percent of city’s total power budget in January and February.
Mayor Read had proposed the moratorium after residents started complaining about rise of cost in their power bills earlier this month. “I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200,” Read told Motherboard. “You can understand why people are upset.” Mayor’s office added that the law is to also protect Plattsburgh’s natural, historic, cultural, and electrical resources as well as the health and well-being of the residents.
This doesn’t necessarily mean that Plattsburgh is hostile to cryptocurrency miners. The town has shown interest in various proposals, including charging the miners for overages in the city’s power budget. Currently, the city has a budget of 104 megawatt-hours per month. If they exceed that, Plattsburgh is then forced to buy electricity on the open market, which can get expensive really quickly for not only the city but the residents too.
Once approved by Read and filed with the New York Secretary of State, the law will go into effect. Officials will work with local crypto miners and residents over the next 18 months to address the power issues.