Last week, Capital Tonight dove into cryptocurrency mining, which is taking place in the Finger Lakes region of upstate New York.
In 2014, Greenidge Generation, owned by Atlas Holdings, took over a formerly defunct coal-fired power plant in Torrey, near Seneca Lake.
Initially, the facility was converted to use natural gas, and to operate as a peaker plant, selling electricity to the grid when demand is at its highest, for example, on the hottest days in August when everyone is using air conditioning.
Later, Greenidge pivoted to mining cryptocurrency, which needs both fresh water and lots of inexpensive electricity. Upstate New York has both, which may lead to more cryptocurrency mining.
Cryptocurrency, such as Bitcoin, is used in international banking and trade. Incidentally, it was also used as the preferred ransom by hackers in the Colonial Pipeline attack.
The allure of cryptocurrency is that transactions are instantaneous, secure and very difficult to trace. The most concerning problem with cryptocurrency is that mining it takes terawatts of energy, and thousands of computers running all day and night.
According to the BBC, “Bitcoin uses more electricity annually than the whole of Argentina, analysis by Cambridge University suggests.”
After learning about the Greenidge plant in Yates County, New York state Assemblywoman Anna Kelles drafted legislation (A7389) to put a moratorium on the process of mining cryptocurrency until a full environmental review of the plant and the process could be conducted.
In an interview with Capital Tonight, Kelles said she is concerned that if cryptocurrency mining continues and expands in the Finger Lakes, that the state won’t meet its goals under the Climate Leadership and Community Protection Act (CLCPA).
“If we have these large entities coming in, buying up these peaker plants that used to run two, three, four, five days out of the year when we absolutely needed them, and now are running 365 days out of the year, and they are the least efficient plants in the state, that that will actually prevent us from reaching our CLCPA goals,” she explained.
There are multiple methods of mining cryptocurrency. Kelles said that her legislation is focused on the kind of mining that uses a “proof of work” model to authenticate the individual transactions.
Because this kind of mining is relatively new to lawmakers, Kelles said there has been a learning curve for some of her colleagues. Tellingly, when Kelles first drafted the moratorium bill, it ended up in the Assembly Banking Committee.
“When I had the discussion about what the bill is actually about, there was a consensus with central staff that of ‘wow, this is definitely an environmental bill’ and it has now transitioned into the Environmental Conservation Committee,” she said.
According to Kelles, Assembly Speaker Carl Heastie knows about cryptocurrency mining.
“He’s very intelligent in this,” she said.