Before New York passed its first-in-the-nation cryptocurrency mining moratorium last year, the mining industry was spoiled with zero regulations and oversight. But the tides are turning. Now, after the Biden administration recommended more regulations and Sen. Ed Markey (D-Mass.)introduced a bill to crack down on the industry’s massive energy use, the industry seems spooked — and is retaliating, tripling its spending on Capitol Hill lobbyists. Some groups are tripling down on Capitol Hill, pushing “Right to Mine” bills in states across the country. These bills, with purported bans on localities enacting zoning and noise ordinances for proof-of-work cryptocurrency mining operations, will squash or at the very least severely chill communities’ rights to govern and protect themselves against for-profit interests. They give big businesses (most crypto mining companies are well-capitalized) the “right” to mine crypto, even over your right to clean water and air, a quiet home and a livable climate.
Many people imagine cryptocurrency miners as regular people at home, mining Bitcoin on their laptops. But that kind of mining is only a small minority, because the more computational power you have, the more Bitcoin you can earn, and mining requires more and more energy over time. Now, mining is profitable primarily for large companies with the means to warehouse tens of thousands of specialty high-powered computers and run them all day, every day.
According to a 2021 paper from the National Bureau of Economic Research, 90 percent of all Bitcoin mined goes to only the top 10 percent of miners, and just .1 percent — about 50 miners — control half of all mining capacity. Make no mistake, Right to Mine bills are designed to protect large, for-profit interests, at the expense of local communities.
With thousands of machines running at once, cryptocurrency mining isn’t just a loud annoyance, which neighbors of a mining facility in Limestone, Tenn., described as sounding “like a jet engine idling on a nearby tarmac.” Neighbors of a cryptocurrency mining facility in Cherokee County, N.C., described the noise as “like living on top of Niagara Falls,” and near Niagara Falls itself, locals complained that the local cryptocurrency mining operation literally drowned out the sound of the falls. There, they won a zoning ordinance — the kind of community self-protection that could be illegal under a state’s Right to Mine law.
Right to Mine bills also appear to seek to shield miners from fair electricity rates on cryptocurrency miners — even though cryptocurrency mining operations often end up costing others who are unlucky enough to share its energy utility. Because these facilities are so energy intensive, they can demand new transmission and distribution lines, infrastructure upgrades, and more. For example, in Paducah, Kentucky, Blockware Mining received $12.7 million in transmission upgrades, raising regular utility customers’ bills to help pay for the upgrades. It’s also common for a cryptocurrency mining operation to just up and leave, sticking locals with the bag. In Washington, a cryptocurrency mining operation that went bankrupt in 2018 left locals to cover its $700,000 in unpaid utility bills. It’s a net negative for these communities, especially because cryptocurrency mining operations are notorious for promising economic development and new jobs without usually delivering.
The cryptocurrency mining industry also wants you to believe that it’s cleaning up electric grids and doing everything it can to fight climate change. Don’t fall for it. Cryptocurrency miners appear to seek out the cheapest energy they can find, wherever they can find it, regardless of how dirty it is. In Missouri, House Bill 764, currently making its way through the state legislature, would increase electricity use in a coal-dominated grid, slowing the state’s transition to clean energy. Montana is similarly coal-dominated, and the Right to Mine bill that recently passed the state Senate there could prevent more local governments from adopting helpful regulations like the ones in Missoula County designed to protect the local community and environment against mining’s negative impacts. Mississippi — another state where a Right to Mine bill recently passed the Senate — has a fracked gas dominated grid. All of these states are moving legislation that will increase the U.S.’s carbon footprint at a time when we need to be laser-focused on reducing it wherever we can.
The kicker? Cryptocurrency doesn’t have to come at the expense of our environment. Proof-of-work cryptocurrency mining is far from the only way to validate cryptocurrencies — other methodologies do not have exorbitant energy demands, nor the other environmental impacts. So, it’s entirely possible for policymakers to be pro-crypto and pro-business without being anti-community and anti-local governance. In fact, the local business community in upstate New York pushed for the cryptocurrency mining moratorium, because the negative impacts of mining threatens their rural, agricultural livelihoods. The federal government cannot shy away from regulating this industry, and states looking to do the same should see Washington state as a model, where House Bill 1416 will apply clean energy standards to cryptocurrency miners. Or of course, the cryptocurrency mining moratorium in New York. We can have it all — but not if Right to Mine bills become law.
Liz Moran is a policy advocate based in the Northeast Office for Earthjustice, working toward policies to combat the climate crisis, protect water quality, keep public health and the environment safe from toxic chemicals, as well as to create more sustainable food and farming practices.