U.S. Markets closed

A New York city becomes first in the U.S. to temporarily ban Bitcoin mining

Jayce Wagner
Mining Bitcoin today is harder than it used to be, but if you have enough time, money, and cheap electricity, you can still turn a profit. Here's how to get started mining Bitcoin at home and in the cloud.

The Plattsburgh, New York city council voted unanimously to introduce an 18-month ban on commercial Bitcoin mining operations within the city. The move comes after city residents complained of wildly inflated electricity bills caused by commercial Bitcoin mining operations taking advantage of the city’s low-cost power.

As Motherboard reports, the moratorium is aimed at new commercial Bitcoin-mining operations, so businesses already operating cryptocurrency mines in Plattsburgh will be able to continue doing business. It’s a stopgap designed to keep power bills for ordinary residents from continuing to grow.

“I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200,” Plattsburgh mayor Colin Read told Motherboard.

The moratorium is only for 18 months and it remains to be seen what will happen once it expires, but local Bitcoin-mining operations are watching these developments carefully. Some even agree that commercial operations should be charged more for using up the city’s cheap, plentiful hydroelectric power.

“I think it’s better to charge the miners more so that people in the city aren’t negatively impacted, than an outright ban. But still reasonably so, or companies won’t want to set up shop here,” said Dan Bowman, a bitcoin entrepreneur, told Motherboard. “I think middle ground should be sought so peoples electric rates don’t go up.”

The main thing that has drawn so many Bitcoin-mining operations to Plattsburgh has been the city’s proximity to a hydroelectric power plant. It’s the reason the city has some of the lowest power costs in the U.S. But those low prices only go so far. The city has an allotment of 104 megawatt-hours of electricity per month, and if it consumes more than that, the city has to buy power on the open market, at much higher rates. That is why notoriously power-hungry Bitcoin operations have inadvertently caused ordinary citizens’ power bills to skyrocket.

The largest mining operation in the city, Coinmint, reportedly used nearly 10 percent of the city’s power budget in January and February. To compensate without scaring off Bitcoin operations, Read suggested a number of potential solutions, including charging local commercial Bitcoin operations for any overages the cause the city to incur. Regardless of how the city ends up deciding to handle the problem of commercial Bitcoin operations sucking up power, looks like it has 18 months to do it.