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The NY Assembly will vote this week on the bill, which seeks a two-year moratorium on PoW cryptocurrency operations permits.
A controversial bill seeking to limit proof-of-work (PoW) cryptocurrency mining is moving forward in New York State.
As reported by CoinDesk The bill was approved by the New York Assembly Ways and Means Committee during a meeting Monday afternoon, who voted to send the bill to the full Assembly. After a year since its introduction, New York Assembly members will now have to decide whether to move forward with the proposal.
First introduced in May 2021 by the New York Senate. The bill in question is No. 6486, which aims to place a two-year moratorium on select PoW-based cryptocurrency operations. The underlying argument is the high energy consumption of such operations; in particular, with regard to carbon-emitting energy sources.
Environmentalists have been pushing for its approval, aiming to curb cryptomining operations by citing the burning destroying a certain number of digital coins to reduce their issue. This method is used to fight inflation and increase the value of cryptocurrency. All token burning transactions are recorded in the blockchain as a transaction. Therefore, anyone can verify that the coins were destroyed. of fossil fuels. As reported by DiarioBitcoin At the end of March, at the end of March, a group of supporters of the project urged Gov. Kathy Hochul to enforce the moratorium He argued that his authority allowed him to do so without the need for prior approval by the Assembly and Senate.
The practical implications of its approval
Overall, the bill has not been well-received among some members of the crypto-enthusiast community, who point out that its passage could negatively impact cryptocurrency companies and stifle innovation in the state. However, as highlighted by CoinDesk The scope of the project is limited.
As such, the legislative proposal addresses cryptomining powered by non-renewable, non-metered energy sources. If passed, it would impose a two-year moratorium on the issuance of new permits for proof-of-work mining operations that propose the use of a “ electricity generating installation using a carbon-based fuel “.
The project would also require a study by the New York State Department of Environmental Conservation (DEC) on the impact of PoW mining within the state’s plan to meet climate goals set by the Climate Leadership and Community Protection Act, which calls for greenhouse gas a term used on the Ethereum platform that refers to a unit of measuring the computational effort of conducting transactions or smart contracts, or launch DApps in the Ethereum network. It is the “fuel” of the Ethereum network. *see Gas Limit and Gas Price. emissions to be reduced 85% by 2050.
In practice, its adoption would imply a total pause in issuing new permits for PoW mining operations until the New York DEC can effectively assess its impact on the environment. It would also involve a restriction on the renewal of permits in cases where there is an increase in the amount of energy consumed; and it would freeze effectively operations at current levels for two years, except those using renewable energy sources.
However, as highlighted by CoinDesk , your approval does not would affect existing proof-of-work mining operations or those planning to use renewable energy sources. state cryptocurrencies, which are plentiful and much cheaper. An earlier version of the bill called for a three-year moratorium on all cryptocurrency in the state.
Industry enthusiasts criticize the measure
Despite its limited scope, the project has generated a lot of controversy and generated a lot of criticism within the crypto industry.
“ New York’s proposed moratorium on proof-of-work poW is a type of consensus algorithm that rewards validators according to the amount of computational power they have expended. mining a process where blocks are added to a blockchain, verifying transactions. It is also the process through which new bitcoin or some altcoins are created. (S6486D/A7389C) has an unintended consequence: it puts innovation on the back burner. “, assured the Cryptocurrency Innovation Council. The group also warned that the move could also have “ significant security the term securities refers to a fungible and tradable financial instrument that carries a type of monetary value. implications of major cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. protocols “.
1/ New York’s proposed moratorium on proof-of-work (S6486D/A7389C) mining has an unintended consequence – it puts innovation on the back burner.
— Crypto Council for Innovation (@crypto_council) April 24, 2022
“ A two-year mining ban sends a very bad message to the Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. industry, to cryptocurrency companies, to Web 3 companies, that New York is telling them, ‘You’re not welcome here.’ “, added John Olsen, from Blockchain Association .
According to CoinDesk The Assembly plenary vote could take place on Thursday . If passed there, the bill will move to the state Senate.
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Article by Hannah Estefania Perez / DiarioBitcoin
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