Published: Sat, March 17, 2018
Money | By Armando Alvarado

City in Upstate New York Issues Temporary Ban on Bitcoin Mining

City in Upstate New York Issues Temporary Ban on Bitcoin Mining

Residents in Plattsburgh have had enough. It generates a lot of heat and uses an inordinate amount of electricity.

A city in upstate NY has become the first in America to effectively ban any new commercial-grade cryptocurrency miners from powering up. Samsung is now making chips that are designed specifically for cryptocurrency mining for coins such as bitcoin and ethereum. This has resulted in big cost increases for everyone, even those who don't know what Bitcoin is.

Mining for cryptocurrency involves powerful computer components that use a large amount of electricity in order to solve complex computational problems. Iceland has many mines because of its cheap power and cold climate that can cool machines without the extensive use of fans that use power as reported in a recent Digital Journal article.

Residents of Plattsburgh have long enjoyed incredibly low energy prices thanks to a nearby hydroelectric dam on the Saint Lawrence River. While residents usually pay $0.045 per kilowatt hour (kWh), industries including Bitcoin mining operations only have to pay $0.02 cents/kWh. For comparison, the United States average is a little over 10 cents per kilowatt-hour.

These complaints are reminiscent of remarks by Quebec Premier Philippe Couillard, who said on March 2 that a hydro-electric utility in the province was unlikely to take on customers who do not offer to add any "value for our society; just having servers to do transaction mining and acquire new bitcoins, I don't see the added value".

Bitcoinist_Datacenter Outage
A New York town becomes first city in the US to ban crypto mining

Tom Pillsworth, a local resident and partner in a Bitcoin mining enterprise in the city, said that, "It would never cost the Plattsburgh citizens any more money to let more miners come in here because the miners are willing to pay for those overages..."

The city only has an allotment of 104 megawatt-hours of electricity per month. When this happens, the residents must share the expense. That ban will last for the next 18 months and it only affects new operations. With such affordable electricity, the city became a mining headquarters for those looking to mine bitcoin and other cryptocurrencies.

Kyle Carlton, a spokesman for Coinmint LLC, which runs operations in both Imperial Industrial Park and Skyway Plaza attended Thursday night's meeting.

The commission's decision follows a petition from the New York Municipal Power Agency (NYMPA), a body made up of 36 municipal power authorities, which "represents customer-owned municipal electric systems that acquire low-priced power, typically hydro, and distribute the power to customers at no profit".

£53m Real Madrid defender confirms contact from Manchester United over transfer
He played the full 90 minutes in both legs as the Liga side cruised past Paris Saint-Germain over two legs in the last 16. Raphael Varane has confirmed that Manchester United are interested in luring him away from Real Madrid .

Like this: