Plattsburgh has been the center of attention when they suggested banning Bitcoin mining because of high power consumption. This became a reality yesterday when the city’s council voted to impose an 18-month moratorium on Bitcoin mining.
Mining is an extremely energy intensive process that secures Bitcoin blockchain, and the miners are rewarded with Bitcoins. This moratorium was proposed by the mayor of Plattsburgh after local residents started reporting wildly inflated electricity bills. The restrictions will, however, affect only new commercial Bitcoin operations and will not affect already existing Bitcoin mining companies which have been in the city before.
According to the city mayor: ‘There have been many complaints about electricity bills going up by $100 or even $200, and that’s the reason many residents are upset.” In the past Plattsburgh has been having the cheapest electricity in the world because of a hydroelectric dam on St. Lawrence River which saw residents pay only 45 cents per kilowatt-hour. This extremely cheap power has been attracting many Bitcoin miners to the city.
Collin Read said the low electricity rate was to promote industries and set their bases in the city and this has turned largely to attract Bitcoin miners who depend on cheap power to make profits from mining. The main problem is that the total power in the city cannot accommodate big mining companies. The largest mining institution in the city is operated by Puerto Rican Company and its called Coinmint. Coinmint already used 10% of the total power produced in the city.
Mining activities forced Plattsburgh to purchase extra power in January because of the high prices. The cost incurred was then distributed among the city’s residents. The residents then became concerned that the cheap power would attract more Bitcoin miners something which would make cheap power disappear forever.
One motherboard read that:
“We may end up using 100 megawatts in two months if we open up the floodgates. This would mean that there would be no cheap power for our residents. We have been reviewing proposals, and some of them could take 20 to 30-megawatt bites of our power something we do not want.”
The 18 months ban is made to create time for the city officials to engage the residents and current miners in finding a solution for the city’s energy problem. The mayor had some suggestions where miners would be forced to pay for any overages of the city power budget or even increasing the rate for the miners. Local miners were on the move and said will work with the town governance to come up with a lasting solution.
Tom Phillsworth who is a Plattsburgh resident and also a partner at a mining company in the town stated that: “It will not cost the residents more money to let miners to the city because the miners are willing to pay for all the overages when it’s cold. The miners are more than willing to meet the costs.”