Plattsburgh, NY bans cryptocurrency mining, first US city to block practice

The city of Plattsburgh, New York voted on Thursday to ban commercial cryptocurrency mining due to skyrocketing electric bills, becoming the first U.S. city to outlaw the burgeoning practice.

The law places an 18-month moratorium on cryptocurrency mining for new operations, which uses powerful computer chips to decrypt blockchains and generate bitcoins – a practice that requires a massive amount of energy. Miners have purportedly flocked to the city for its below-average electricity costs, thanks to a nearby hydroelectric dam.

Electricity use among cryptocurrency miners ballooned to such an extent in January that Plattsburgh exceeded its power allotment and was forced to buy more to meet the city’s needs, Vice’s Motherboard reported. A single mining operation used 10% of the area’s monthly budget in the first two months of 2018.

“I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200,” Plattsburgh Mayor Colin Read told Motherboard. “You can understand why people are upset.”

The law allows companies that have already been granted mining permits to continue their work. Plattsburgh is amending lighting department regulations to allow officials to regulate commercial cryptocurrency, and any violations will be penalized with fines of up to $1,000 per day and the potential seizure of computer mining equipment, according to a news release.

Plattsburgh officials said the ban is necessary to “protect and enhance the City’s natural, historic, cultural and electrical resources.”

Cryptocurrencies are not regulated by any central government and have emerged as a popular method of anonymously storing and transferring wealth. Critics argue that popular digital currencies such as bitcoin and ethereum are facilitating illicit activity and are trading at levels that indicate they are a bubble.

A single bitcoin was worth more than $8,500 as of Friday afternoon, according to Coinbase.