Plattsburgh N.Y. bans cryptocoin mining for 18 months
The city of Plattsburgh in New York state has become the first US city to ban cryptocurrency mining. The ban is set to last for the next 18 months.
At a council meeting the other night the ban was passed unanimously. The Plattsburgh mayor's office claims that the aim of the law is to consider “regulations before commercial cryptocurrency mining operations results in irreversible change to the character and direction of the city.”
Cryptocoin miners attracted by cheap power rates
Colin Read, Plattsburgh mayor claimed that the residential rate of 4.5 cents per kilowatt hour were the cheapest rates in the world. Whether that is so it is much lower than the 10 cents on average the rest of the country pays. It will obviously attract miners to the city and as the enclosed video shows, already has. The city also charges industrial enterprises only 2 cents per kilowatt per hour as an incentive for companies to move to Plattsbugh.
Coinmint operates in Plattsburgh
Coinmint operates the largest bitcoin mine in the city. Bitcoin mines use enormous amounts of electricity. In January and February the mine used about ten percent of the total amount of power used by the city.
Power bills soar for city residents
Plattsburgh is allocated 104 megawatt hours at the cheap rate per month. When the allotment is exceeded, the city has to purchase power at a much higher rate on the open market. As a result, some residents have seen their monthly bills go up by one hundred or even two hundred dollars according to complaints made to the mayor. Given this background one can understand why the bill came to council and was passed without a single negative vote.
Cryptocurrency mining
Cryptocurrency mining refers to the process of solving mathematical problems by computation. When a problem is solved the miner gets to secure a block in the blockchain and is rewarded with coins. The more coins are mined the more difficult the problem. In simplified form the process is described in the video below.
Minders search worldwide to find cheap sources of power. 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.
As more and more powerful computers are used there is a shortage of the chips needed to provide all the computing power needed. This has created shortages of chips in areas such as gaming and even astronomical research.
Samsung is now making chips that are designed specifically for cryptocurrency mining for coins such as bitcoin and ethereum.
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