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For the First Time, a US City Has Banned Cryptocurrency Mining (businessinsider.com)
CaptainDork writes: The city of Plattsburgh, New York is imposing an 18-month moratorium on commercial cryptocurrency mining. The official reasoning for the moratorium is to "protect and enhance the City's natural, historic, cultural and electrical resources." Plattsburgh residents have seen skyrocketing electrical bills -- as much as $100 to $200 increases -- as a result of commercial cryptomining operations that mine for cryptocurrencies like bitcoin, according to Plattsburgh Mayor Colin Read, who spoke with Motherboard. The city is taking action to protect its citizens from those rising electrical bills that the city of Plattsburgh says is caused by cryptomining operations.
It turns out that commercial cryptocurrency mining operations used up so much electricity that the city of Plattsburgh exceeded its allotted monthly budget of electricity. One single cryptocurrency mining operation called Coinmint used up around 10% of the city's allotted power supply alone in January and February, according to Motherboard. When its electrical budget was exceeded in January, the city had to buy electricity from the open market at a higher cost, which was distributed among its residents.
It turns out that commercial cryptocurrency mining operations used up so much electricity that the city of Plattsburgh exceeded its allotted monthly budget of electricity. One single cryptocurrency mining operation called Coinmint used up around 10% of the city's allotted power supply alone in January and February, according to Motherboard. When its electrical budget was exceeded in January, the city had to buy electricity from the open market at a higher cost, which was distributed among its residents.
This is sort of a half-fix but what would ultimately mean is that when a city installs a lot of solar/other stuff (for the benefit of their citizens to lower pollution/electricity costs/etc) and thus have excess cheap power to sell back to the grid or use, bitcoin miners would move in and use up all excess while its cheap, leading to the permanent residents of a town getting no cost benefit to doing it. They might even have to fire up the coal plants again to meet demand.
I can totally understand permanent residents of a city working with the council to basically say nope to that. They live there. Its their choice, thats how city governance works.
Otherwise what ends up happening is that the miners move in and starts increasing demand whenever the cost is under a certain amount, which means the cost has a strict floor at the price of bitcoin generation. It can never ever be cheaper than that, because the moment its cheaper than that, miners absorb all the excess, causing the cost of electricity to be tied to the price of bitcoin, something you probably don't want for your city if you live there, especially if you've been investing in infrastructure to reduce energy prices / clean pollution.
It gets worse, too. You might decide 'fine, let the market decide', so you are forced to build more electricity-producing plants to meet this rising demand and keep pushing costs down or face brownouts / blackouts in residential. Its really, really really expensive to build electric generation plants and the infrastructure to support them, and it takes a really long time, and they are expensive to maintain running, even if you 'turn them off'. But the miners move out whenever there's some other better opportunity elsewhere, leaving you with all this infrastructure your permanent residents payed for and are being taxed on...
They simply don't know how to manage the economy.
Nobody does. It's the authoritarians that think they know how to "manage" an economy better than 300 million free agents that creates nightmares.
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia