March 16th, 2018: With the industry’s interest in mining cryptocurrencies growing by the day, some state and local governments are being forced to collide with ambitious miners. Just yesterday, the city of Plattsburgh, New York placed an 18 month moratorium on cryptocurrency mining in the area. The concerns grew over time as new miners were using the city and extended area as a base for establishing large mining farms. The reason all these miners have been flocking to Plattsburgh? Cheap electricity.
Plattsburgh major Colin Read has stated before that residents in the area have the “cheapest energy in the world.” On average, residents of the area are paying around 4.5 cents per kilowatt-hour compared to the national average that’s closer to around 10 cents per kilowatt-hour. On the list of US energy usage and payments, New York state is even higher with an average of almost 15 cents per kilowatt-hour; Plattsburgh residents are paying effectively 1/3rd of what the rest of the state is paying. Or rather, they were.
Major Read originally proposed this ban earlier this month because of the effects the cheap electricity had on drawing in more outsiders. With such affordable electricity, the city became a mining headquarters for those looking to mine bitcoin and other cryptocurrencies. Originally, the affordable energy was intended to help bring in more outside investment and businesses to the area, but preferably not ones that were going to drain the community of energy usage.
Because of how many miners there are in the area, Plattsburgh went over its standard energy allotment in January. Cold months, especially in the Northeast, mean a lot of energy consumption for communities, even with no miners. Once the miners’ energy consumption was added to the demand, Plattsburgh quickly found itself over their allotment, meaning the city had to outsource their needs and purchase electricity for use. The result of having to resort to purchasing energy was a large increase in electricity rates for everyone in the city.
The moratorium on cryptocurrency mining is for 18 months until a more fair solution can be brought to the table to benefits everyone involved. Where it currently stands, the law will only affect new businesses looking to come to Plattsburgh, not any of the mining operations already in business. During those 18 months, city officials will be working with residents and business owners to find an equitable long-term solution.
