Memorandum of Opposition: NYS Assembly Committee on Environmental Conservation

March 22, 2022

Memorandum of Opposition

To: NYS Assembly Committee on Environmental Conservation   

From: Chamber of Digital Commerce

Re: A.7389-C (Asm. A. Kelles)/S.6486-D (Sen. K. Parker)

Date: Tuesday March 22, 2022

 

As the State Assembly continues to advance its 2022 policy agenda, the Chamber of Digital Commerce, writes to express opposition to A.7389-C that if enacted, would establish a moratorium on digital asset mining operations that use proof-of-work authentication methods to validate blockchain transactions. The proof-of-work mining industry is spurring economic growth, job creation, economic inclusion for historically underrepresented populations and innovation in New York, and this is being achieved while also creating financial incentives for the buildout of renewable energy infrastructure.

Established in 2014 as the world’s first and largest blockchain trade association, the Chamber’s mission is to promote the acceptance and use of digital assets and blockchain technology. We are supported by a diverse membership that represents the blockchain industry globally, including more than 200 of the world’s leading startups, software companies, financial institutions, and investment firms, as well as other market participants, including digital asset mining firms. 

According to the state Division of Budget, it is the policy of the State of New York to conserve, improve and protect its natural resources and environment and to prevent, abate and control water, land and air pollution, in order to enhance the health, safety and welfare of the people of the state and their overall economic and social well-being. In 2019, to mitigate the current and future effects of climate change, the State of New York implemented the Climate Leadership and Community Protection Act, requiring that statewide greenhouse gas emissions be reduced 85% by 2050 and that the state has net zero emissions in all sectors of the economy by that time.  Proof-of-work mining is a catalyst to achieve this goal.

The Bitcoin Mining Council has estimated that the global mining industry’s sustainable electricity mix is 58.5% and growing. Mining operations running proof-of-work authentication methods offer unique capabilities that traditional data centers and energy consumers cannot. One example of how the industry can benefit the population is the unique ability to power down, known as “curtailment,” during peak usage for rate-payers. Proof-of-work mining can provide a utility with a reliable base load customer that can provide a stable consistent demand to justify build out of clean energy infrastructure. 

Further, on the rare occasions when customer demand spikes, for example, during extreme weather events that create heating or cooling peaks, proof-of-work miners can work cooperatively with utilities to cut off their power demands for the benefit of the grid in mere minutes with no adverse effects – unlike data centers, cloud service providers and manufacturing facilities.  Proof-of-work miners power down to allow critical usage of power at community assets like hospitals and municipal government or cooling and heating during weather extremes. No other industry that uses the amount of energy as proof-of-work mining has the capacity to do this.

Bitcoin has been adopted by over 100 million individuals worldwide over its short lifetime and proof-of-work mining is the foundation of this ecosystem, creating an opportunity for millions of people in less fortunate economic circumstances and the unbanked. Cryptocurrency represents a breakthrough by offering workers and savers a way to protect themselves from inflation and provide access to the financial system by storing their wealth in a medium that is independent of banks, fees and long-standing inequities in our banking system.

Although we oppose the moratorium, we welcome the opportunity to engage further with the State Assembly to answer any questions and continue the conversation on this emerging industry in the state of New York.