US Town Plans Freeze on Energy-Hungry Bitcoin Mining Operations
The US town of Plattsburgh wants to impose an 18-month moratorium on cryptocurrency mining amid surging demand for electricity.
The power demands of Bitcoin mining operations are proving a headache for Plattsburgh, and the mayor of this small town in New York State is proposing a moratorium on cryptocurrency mining.
The plan is to suspend such activities for 18 months “to allow the City of Plattsburgh the opportunity to consider zoning and land use laws and municipal lighting department regulations before commercial cryptocurrency mining operations result in irreversible change to the character and direction of the City.”
In a February interview with the New York Times, Plattsburgh Mayor Colin Read said the two Bitcoin mining operations in town consume nearly 10% of its power supply. Plattsburgh gets a fixed amount of low-cost electricity under a deal signed during the construction of hydroelectric dams on the St. Lawrence River back in the 1950s. However, the mining ventures are draining a significant portion of this supply, forcing the town to make up for it by purchases on the open market. As Read pointed out, rates there can go as much as 100 times above the base cost.
Bill Treacy of Plattsburgh’s Municipal Lighting Department echoed Read’s concerns, adding that the town is already buying additional power during normal seasonal upswings in energy demand and Bitcoin mining will exacerbate the problem.
As expected, the proposed bill is met with resistance by the local crypto miners.
David Bowman, who operates one of the Bitcoin mining firms, commented:
"I think the proposed law is unnecessary and I'm worried that Plattsburgh could miss out on an opportunity for innovation. It's basically in the early stages of development like the internet was. In my view, an outright moratorium would hurt the city more in the long run because it would miss out on all that."
Governments up in arms against crypto mining
In Canada, the government of Quebec has expressed unwillingness to provide cheap electricity to Bitcoin miners, casting serious doubt on the chances of this region to become the next hub for digital currency mining. The province, which owns the Hydro-Quebec power utility, said it does not believe that Bitcoin mining operations would bring added value to the community and expressed skepticism over their actual contribution to the local economy.
Last month, Iceland said the cryptocurrency mining boom is putting a strain on its power grid. Johann Snorri Sigurbergsson, head of business development at energy provider HS Okra, noted that the electricity demands of mining centers could surpass those of households.