The people of Plattsburgh, New York have had enough. On Thursday night, the city council approved an 18-month moratorium on new cryptocurrency mining operations. The temporary ban will be used to figure out what to do with these ding dong miners using up all the electricity.
Most cryptocurrencies require a “mining” process in which servers are used to guess the solution to a complex equation—the computer that gets the answer gets the newly minted coin. It takes a lot of electricity to be a miner, and the ones who are successful tend to use a large network of mining rigs. To cut down on their energy expenses, miners have flocked to cities with cheap power and we’re just beginning to learn what cost that brings for the municipalities themselves.
ADVERTISEMENT
At its most recent city council meeting, Plattsburgh took up the issue and decided that no new mining operations will be allowed for the next 18 months. Existing operations will not be affected by the moratorium. Plattsburgh Mayor Colin Read told Motherboard his city has the “cheapest electricity in the world” thanks to its close proximity to a hydroelectric dam. The national average for electricity costs is just over 10 cents per kilowatt-hour; in Plattsburgh, it’s just 4.5 cents. But the city decided to offer industrial operations an even better rate of 2 cents per kilowatt-hour. And then the miners came to town.
According to Motherboard, Plattsburgh gets 104 megawatt-hours of electricity per month and if it exceeds its allotment more has to be purchased on the open market at a significant premium. In January, Plattsburgh used too much electricity and the bills for everyone in town rose, in some cases by $100 to $200. While this has been known to happen in the winter months, the state Public Service Commission (PSC) concluded that the average resident in Plattsburgh saw a $10 increase on their bill in January just because of two cryptocurrency companies. The largest operation, Coinmint, used about 10 percent of the city’s power in January and February.
Local lawmakers plan to work with the mining operations that are already present and use the moratorium to buy time while they come up with a permanent solution. On Thursday, the PSC gave upstate power authorities the ability to impose tariffs on cryptocurrency miners, and Read told Motherboard it’s possible that they’ll be required to cover any overages.
ADVERTISEMENT
But it all raises a larger question about the economic value of Bitcoin. When a town drops its electricity rates to encourage industrial investment, and all the extra electricity gets used by miners, what benefit comes to the town? Coinmint is a Puerto Rico-based company, and mining operations don’t exactly create a lot of jobs. One resident, Tom Hilsworth, told NBC 5 that he fears Plattsburgh will miss out on the blockchain boom if it isn’t friendly to mining operations. But the blockchain doesn’t really produce anything. Some people are making space bucks that can be converted into taxable dollars, and some random new technical positions are being created, but it’s all a far cry from the economic benefits of a traditional industry moving in. And with the cryptocurrencies sagging, the whole enterprise is delivering diminishing returns.
Introducing:
Autominer Gen. 3
The most powerful Altcoin mining rig on the planet! (30.10.17)
We are proud to introduce our most powerful rig yet, the Autominer Generation 3.
Same practical design, 30% more power!
13 cards efficiently placed in a compact, stackable box with ETH hashrates from 230-260 for our “home and garage” version using full size NVIDIA cards, to a whopping 320-350 MH/s with the loud and power hungry RX570 for data centers and mining farms.
Please note that due to the limitations of Windows all our rigs are now Linux based. However, we have taken great care to keep an easy to use interface and all plug & play capabilities for this version.
We are now accepting pre-orders with a 50% deposit and 30 day delivery target. If you would like to order more than one unit or have any questions, please contact us!
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://gizmodo.com/city-in-new-york-becomes-first-to-ban-new-bitcoin-minin-1823826338
New York Power Companies Can Now Raise Rates for Bitcoin Miners
The state of New York may be a difficult place to set up a mining venture in the region as lawmakers have ruled that power companies can raise their electricity rates if miners choose to use the state’s hydropower.
Also Read: From ‘Attack’ to ‘Optimization’ — Slush Pool Reveals ASIC Boost Compatibility
Charging Higher Electricity Rates to Cryptocurrency Companies
New York Power Companies Can Now Raise Rates for Bitcoin MinersThe New York State Public Service Commission (PSC) has decided to allow municipal electricity providers the ability to raise rates for bitcoin miners and data centers. The reason NY officials chose to let power companies raise electric rates is because 36 municipal power suppliers petitioned the PSC committee. The power companies believe that when data centers and cryptocurrency miners take advantage of the cheap hydropower in the state, average customers lose out. The PSC ruling on March 15th states:
The New York State Public Service Commission today ruled that upstate municipal power authorities could charge higher electricity rates to cryptocurrency companies that require huge amounts of electricity to conduct business. The ruling was needed to level the playing field and prevent local electricity prices for existing residential and business customers from skyrocketing due to the soaring local demand for electricity.
New York Power Companies Can Now Raise Rates for Bitcoin Miners
Cryptocurrency Entities: A Different Character Than Load Characteristics Typically Seen
According to the power companies, several of them have seen an increase in requests from commercial customers seeking large amounts of power. “These requests come mainly from similar types of potential customers: server farms, generally devoted to data processing for cryptocurrencies,” explains the filing.
The ruling goes on to state: “Cryptocurrency entities, such as Bitcoin developers, use massive banks of computers to run a complex software program that will create, or “mine”, digital currency — As some of these customers have come online, it has become clear that the type of electricity load demand was of a different character than load characteristics typically seen by NYMPA members.”
Any Operation That Exceeds 250 kWh Per Square Foot Per Year Will Face Tariffs
The news also follows the town of Plattsburgh New York proposing a moratorium request against bitcoin mining operations last week. News.Bitcoin.com reported on how the Mayor’s office cited concerns about the amount of energy consumption these operations were using. Plattsburgh’s Mayor Colin Read also detailed back in February that he would rather see high electricity consuming businesses pay real employees, rather than warehouses filled with just machines.
The PSC decision can be enforced by the electric providers this month the commission details, and it will allow power companies to create a new tariff on all high-density load operations. Those who exceed 300 kW and a load density that exceeds 250 kWh per square foot per year could see increases in costs next month.
What do you think about the New York State Public Service Commission allowing power companies to raise rates for miners? Let us know what you think in the comments below.