Note to bitcoin miners: you’re not welcome in Plattsburgh, New York — at least for now.
The upstate New York town officially banned new bitcoin mining operations for up to 18 months following a unanimous city council vote on Thursday — becoming the first city in the U.S. to block miners. Current bitcoin miners are allowed to stick around, but newbies won’t be allowed.
“We needed a moratorium to give us time to really flesh out the public policy,” Plattsburgh Mayor Colin L. Read told TheWrap.
Plattsburgh, with a population of about 20,000, has become a go-to spot for cryptocurrency enthusiasts because of its cheap electricity, as Motherboard first reported.
That’s especially important for bitcoin mining, where high-powered computers compete to calculate a math equation that closes a block on the bitcoin blockchain. This process verifies a slate of transactions within the block — and the winning miner is rewarded with 12.5 bitcoins. At about $8,500 a coin on Friday, that’s a nice chunk of change, but mining takes a grip of electricity … and that’s where the problem lies for Plattsburgh.
The town has a fixed allotment of electricity each month — thanks to an agreement with hydroelectric dams on the St. Lawrence River — and city officials think the bitcoin miners are eating up too much of it. Coinmint, the biggest bitcoin mining operation in Plattsburgh, used about 10 percent of the town’s electricity budget between January and February, according to Motherboard.
Read told TheWrap that his constituents have been hit hard with increased utility prices as a result. Electricity bills have jumped about $20 to $50 for apartment renters, and $100 to $200 for homeowners.
“The last two winters, even though they haven’t been unusually cold, we’ve been pushed over the quota, and a number of rate payers now believe it’s because bitcoin represents about 15 percent of our power consumption — upwards of 30 percent on a typical [cold] day,” the mayor explained.
A self-described “nerdy guy,” Read said this shouldn’t be interpreted as an anti-bitcoin crusade. Rather, he said he wants to “encourage and promote” the budding industry once they can resolve the energy issues.