Bitcoin is stumbling through a periodic cycle of hype and then crashes, meanwhile they are also facing a new challenge in the upstate New York. In New York, a ban on mining has been applied recently. The city council of Plattsburgh has placed an 18-month ban on Bitcoin mining. It is considered to be the first of its kind of ban in the country. Mayor Colin Reed said, “My goal is to protect the ratepayers. We don’t have an unlimited amount of electricity.” Plattsburgh lies near the St. Lawrence River and has a nearby hydroelectric station which provides the city with extremely cheap electricity rates.
Before cryptocurrency rose, the town was paying 4.5 cents per kilowatt-hour since they were using hydroelectric power. Hence, the cryptocurrency miners took it as an opportunity to set up their businesses in there. The two cryptocurrency businesses started consuming massive amounts of electricity in the area. The businesses were employing only a few people and were using more power than the entire Georgia-Pacific paper mill.
Because of the crypto businesses, the city also exceeded its allotment of hydropower twice in the winter. Reed said, “We could use 100 megawatts in two months’ time if we opened up the floodgates. And then there would be no cheap power left for our residents. Some of the proposals we’ve been seeing, they want to take 20 or 30-megawatt bites of power, and we don’t have that.” The crypto companies are not for the 20,000 pleasant neighbours of the city. Bitcoin and other crypto mining require huge fans to cool off their computers which are working at full capacity all the time. This was concerning for neighbours who were living across the street. A resident said, “The city went and zoned that area industrial, but they never considered the seven homes that are right there.”
A spokesman for Coinmint LLC, Kyle Carlton, who is operating both the cryptocurrency operations in the town said that the company is sympathetic to the members of the town. He said, “The last thing we want to see is people’s bills increase. All options are on the table as we seek to partner with the city.” He said that the company is providing economic benefit to the city, however, he didn’t name any specifics or any full-time jobs that they have created there.
Another speaker in the favor of the crypto mining said that 18 months is a very long period for the crypto to restart in the area. “Eighteen months is a lifetime on the internet. The message is: You are not welcome here.” The city council voted unanimously for the ban after that.