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.

Comments

Good

[nwaack]

It's about damn time we start putting an end to this idiocy.

Re:Good

[Anonymous Coward]

They didn't ban residential users, they banned companies from coming into their town and setting up a mining operation. The town had previously subsidized power for industrial users, in order to try to attract companies that would create jobs. The bit coin miners will just no longer be getting that subsidy, because they don't create jobs, and use up all the power forcing the town to buy it off the open market and raising the price for everyone.

two bitcoin mining operations were using 10% of the towns cheap power and increased everyone's bill by about $10 for jan and feb.

Re:Good

[bv728]

Since nobody seems to be putting the actual facts as a response:

As part of an agreement with the power company, the city gave them the right to build a large hydroelectric dam on city property in exchange for access to an allotment of power at an extremely cheap rate. When they exceed that allotment, the city has to buy off power exchange, which is significantly more, accounting for covering storage, exchange, and transmission costs on the larger network.

The city very rarely (or never) exceeded that allotment before, and now is. Because of how the contracts are structured, that additional cost is passed on to all consumers on their bill - everyone pays based on time-windowed averaged costs of power over the month, not the exact real cost at the moment of consumption (this is pretty normal due to storage and variable rates per time block otherwise making bills goofy complicated).

The result is they voted in an 18-month stop on NEW cryptomining operations (existing ones can continue) with a plan to submit to the appropriate regulatory bodies a modification to electrical pricing that would allow them to place the additional costs from the Power Exchange on high power utilization businesses, rather than across all users. The cryptomining operations mostly seem okay with this, as the proposal still sees them get a decent chunk of cheap power.

wrong problem

[supernova87a]

The city doesn't need to ban currency mining. They need to fix their electricity tariff (rates).

If currency miners find that it's economical to spend electricity like this, it means that the city is not charging commercial / residential customers the appropriate amounts when they exceed reasonable usage levels. They need to fix that. It probably means that a bunch of other things about their electricity and water and government services are priced incorrectly / being abused as well.

What can you do? All these local/town governments were set up with rules dating from 50 years ago, and they've never changed or adapted since.

Re:wrong problem

[Vektuz]

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...

Old ideas that are still unproven

[OrangeTide]

If the US didn't learn from the Great Depression that a regulated economy is necessary to avoid misapplication of resources and improper allocation of financial responsibility, then we are all fucked (globally)

I'm very confident that we learned little. We're still pushing 100 year old ideas of laissez-faire capitalism, supply-side economics, and trickle-down economics. Even in the 19th century the ideas of trickle-down were well known enough to be controversial in its day.

"That's what happens when the Republicans take over—not only Nixon, but any of them. They simply don't know how to manage the economy. They're so busy operating the trickle-down theory, giving the richest corporations the biggest break, that the whole thing goes to hell in a handbasket." -- President Lyndon B. Johnson

Re:How to enforce the ban

[will_die]

No officer I am not running a bunch of computers, I'm growing weed.