A New York city is considering a mining ban due to heavy electricity consumption

A small manufacturing town in upstate New York is considering an 18-month ban on businesses that mine bitcoin and other virtual currencies.

Plattsburgh Mayor Colin Read has introduced a motion to the city council in an effort to buy time to establish a local regulatory system.

The reason is the huge energy consumption.

Bitcoin mining requires huge computing power, which means huge electricity consumption. In an interview with the New York Times earlier this year, Mayor Reed said that about 10% of Plattsburgh's total monthly electricity consumption is currently used for mining. The city has signed a long-term contract with the power company, and as long as their total electricity consumption does not exceed a certain critical value, they can always enjoy discounted prices.

He added that because mining consumes so much electricity, the city has to buy extra power, which sometimes costs up to 100 times the discounted price.

In fact, the electricity consumed by Bitcoin miners in the local area is already comparable to that of a plastics manufacturer, but mining does not require much manpower and cannot create many jobs for the local area, while the plastics factory employs 200 local people.

As we all know, virtual currency mining requires a lot of electricity. As the prices of these virtual currencies rise, the returns of mining activities continue to increase, the activity level increases, and the amount of electricity consumed also explodes.

Iceland has become a hot spot for mining because of its cold climate, which helps keep servers cool. This year, Icelandic miners have consumed more electricity than the country's entire household electricity consumption.

Alex de Vries, a cryptocurrency analyst, estimates that based on the current price of bitcoin, global bitcoin mining will consume 54 terawatts of electricity per year. By comparison, Israel's annual electricity consumption is only 56 terawatts.

For smaller towns, mining operations could easily put a huge strain on electricity supplies, exposing other local businesses to the risk of increased costs.

Mining is about finding the 20% of the 21 million bitcoins that have yet to be “mined.” As the number of bitcoins available continues to decrease, the amount of electricity required to discover hidden wealth will continue to rise.

Despite these problems, almost no city or country has taken steps to completely ban mining.

In February, the Chelan City Council in Washington state issued a six-month ban on mining in residential areas due to safety and energy considerations. Prior to this, the area had attracted many miners to settle in.

China has also taken some measures to suppress mining operations, hoping to drive miners out of the country. Their method is to cut the power supply that mining companies can get, but rather than protecting the power supply, this seems to be more part of the Chinese government's efforts to crack down on virtual currency speculation.

On the contrary, some regions in Canada, such as Quebec, have recently welcomed miners, mainly because there is still a large amount of surplus electricity capacity in the area.

David Bowman, one of the miners in Plattsburgh, said it was a mistake to crack down on mining. “The current situation is very similar to the early days of the Internet.”

"In my opinion, a blunt ban would be detrimental to cities in the long run because they would lose all that."