Courtesy of The Ithaca Times

Although Assemblywoman Anna Kelles’ (D-125th District) cryptomining moratorium bill died in the New York State Assembly this month, the representative remains relentless in her pursuit to pass the legislation.

June 25, 2021

Kelles Continues to Push for Cryptomining Moratorium, Sees Finger Lakes at Risk

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Although Assemblywoman Anna Kelles’ (D-125th District) cryptomining moratorium bill died in the State Assembly this month, the representative remains relentless in her pursuit to pass the legislation. 

The bill seeks to place a moratorium on operating cryptomining facilities in New York State pending a statewide environmental review to assess the environmental impact of these facilities. After passing the senate, it faltered in the assembly. She will reintroduce the bill in January 2022. 

Kelles originally introduced the bill in May 2021 in response to the current cryptomining trend in New York State, in which investors are repurposing old power plants into cryptomining facilities. This current trend, symptomatic of the global frenzy to increase shares of the cryptocurrency market, potentially carries numerous disastrous effects on the environment with respect to climate, water, waste and air quality.  

Lacking a centralized validation and storage location, cryptocurrencies use various mechanisms to validate and record transactions, which are tracked in a blockchain. Different cryptocurrencies use various methods to do this, and the method of authentication used by Bicoin and Ethereum — the currencies with the largest shares in the market — requires massive amounts of energy. 

This method of authentication entails solving a complicated mathematical equation. Whoever solves the equation first wins the cryptocurrency. However, the equations are so complicated that the most efficient mode by which to solve them requires generating random strings of numbers into random orders. 

“You cannot write a software that is more efficient than randomly entering numbers in itself,” Kelles said. “The only way that you can get an edge is just by having more computers running at random all the time.” 

Computers at these repurposed power plant facilities string together random numbers in random numbers 24 hours a day, seven days a week, 365 days a year. The constant output consumes massive amounts of energy.  

According to Kelles, the energy intensive cryptomining process releases enormous amounts of pollutants such as methane and carbon dioxide into the air which harm the environment and degrade air quality. This process contradicts the Climate Leadership and Community Protection Act of 2019, which set aggressive targets for reducing total greenhouse gas emissions in New York State.

Beyond the detrimental emissions the facilities create, the computers use 130 million gallons of water from the surrounding lakes, including Seneca Lake currently, each day as a cheap coolant. The facilities then dump this water back into the lake at higher temperatures, which carries both short term and long term consequences, not only harming underwater ecosystems, but also increasing the risk of harmful algal blooms. 

“[The heated water] is entering first into the class C trout stream which does actually significantly affect that very localized ecosystem — for the trout, that is their spawning ground,” Kelles said. “But there is also evidence that there is significant or there is increase in the temperature of the lake and higher temperatures is one of the risk factors for outbreaks of harmful algal blooms in the north.” 

After cryptomining took over the old power plant in Dresden on Seneca Lake, there has been some local concern that the plant in Lansing could be targeted, putting Cayuga Lake at risk too.

Kelles said that an additional environmental concern is the large amount of waste these facilities produce due to computer burnout from constantly running. An additional factor that creates waste is technological turnover. Mining is done with specialized, singular purpose hardware and as technology advances to make these computers faster, companies will replace them to maintain a competitive advantage in solving the equations through the computer-generated number sequences. 

The problems with cryptomining go beyond environmental concerns according to Kelles. She said that cryptocurrencies gained popularity among many individuals as a response to the consolidation of wealth among small swaths of the population, but this intended “people’s currency” actually has the potential to amplify wealth inequalities.  

“If the equations get harder over time, and they cannot be solved in any way, except for randomness, the only way you can get an edge is by having more computers,” she said. “So ultimately, the wealthy are the people who are winning the majority of the currency which completely counters the initial intent.”  

Even though the moratorium garnered the support of major environmental organizations across the state, labor unions served as a major roadblock to its passage. The International Brotherhood of Electrical Workers wrote a memorandum in opposition to the bill, arguing that it unfairly targets a specific industry and further does not take into account the benefits generated by the mining sites such as the generation of jobs and capital. 

According to Kelles, however, many of the professed economic benefits of the cryptomining facilities are unfounded. The capital it generates circulates within global markets rather than the local communities, and the job creation does not benefit the local communities either. 

“The jobs it does create are more high-end engineering jobs, which very often is a mismatch with the skills of the labor force,” she said. “So even if it was to create a handful of jobs, very few, if any, in many of the upstate communities will have the skill set of those jobs.” 

Although she anticipates opposition from unions and corporations with interests in the process to persist, she will continue to advocate for the bill in earnest. 

“I’m going to just keep going. By [January] I’ll have six more months behind me building coalitions, educating the public, having conversations with the unions, and then it will be reintroduced,” she said. “This is my primary focus and I will not let it fail. The environment can afford it right now.” 

This story was originally published by The Ithaca Times as a part of The Cornell Daily Sun Ithaca News Fellowship.