While the Bitcoin stumbles through its cycles of hype and crashing, in upstate New York, it's facing a new challenge: a ban on mining. The city council of Plattsburgh, New York has placed an 18-month moratorium on Bitcoin mining, believed to be the first such ban in the country.
“My goal is to protect the ratepayers,” Mayor Colin Reed at a crowded city council meeting on Thursday. “We don’t have an unlimited amount of electricity.”
Plattsburgh lies near the St. Lawrence river and a provides it with extremely cheap electricity rates. Before the rise of cryptocurrency, a small town paying 4.5 cents per kilowatt-hour thanks to hydroelectric power (the U.S average is 10 cents) would be seen as one of the benefits of rural life. Cryptocurrency miners saw it as the perfect opportunity to set up shop.
Two cryptocurrency businesses have started to consume massive amounts of electricity in the area, crunching through complex algorithms 24 hours a day. The businesses, notes the Press-Republican, a local paper, "employ just a few people" and "use more power than the entire Georgia-Pacific paper mill," a business which has been in the town for .
Thanks to the crypto businesses, the city's exceeded its allotment of hydro power twice this winter. An especially cold season didn't help matters either, but the city council can't make moratoriums on the weather.
"We could use 100 megawatts in two months’ time if we opened up the floodgates,” Read Motherboard. “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 haven't made for especially pleasant neighbors in the town of just under 20,000 residents. Crypto mines require large fans to cool their computers working at fully capacity all the time. That was concerning for neighbors who lived across the street. “The city went and zoned that area industrial, but they never considered the seven homes that are right there,” one resident said at the council meeting.
Kyle Carlton, a spokesman for Coinmint LLC, which operates both cryptocurrency operations in the town, said the company was sympathetic to the town's plight.
“The last thing we want to see is people’s bills increase,” Carlton said, adding that “all options are on the table as we seek to partner with the city.” Coinmint, , is based out of Puerto Rico. Carlton said that the company was providing a positive economic benefit to the upstate region although he could not name any specifics or identify any full-time jobs the industry had created.
Another speaker in favor of cryptocurrency, Cristian Balan, a lecturer for the Center for Cybersecurity and Technology at SUNY Plattsburgh, warned that 18 months would be far too long for any sort of crypto business to restart in the area.
“Eighteen months is a lifetime on the internet,” Balan said. “The message is: You are not welcome here.”
After that, the city council voted unanimously for the ban. Evidently it understood its message loud and clear.