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Author Topic: [2018-03-16] Fortune Bitcoin Mining Was Just Banned in a Small Town  (Read 42 times)
bigNoizboo
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March 17, 2018, 06:47:12 AM
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A small lakeside town in upstate New York is fed up with Bitcoin miners using up so much of its low-cost electricity.

Plattsburgh, whose residents are a quick jaunt from the Canadian border, has put an 18-month moratorium on cryptocurrency mining to preserve natural resources, the health of its residents, and the “character and direction” of the city.

“It is the purpose of this Local Law to facilitate the adoption of land use and zoning and/or municipal lighting department regulations to protect and enhance the City’s natural, historic, cultural and electrical resources,” Plattsburgh said after holding a public hearing on the matter Thursday.

For a year and a half, the almost 20,000-resident city will not consider new applications for commercial cryptocurrency mining. And if you break the rules, you’ll owe Plattsburgh up to $1,000 for each day you violate the moratorium.

Mining, a process by which individuals or groups get paid in new Bitcoins to run complex mathematical equations on high-powered computers in order to confirm the validity of transactions, has drawn scrutiny from environmentalists who say it’s sucking up too much electricity. Some have estimated that Bitcoin miners will use more power than electric cars in the near term.

Plattsburgh gets cheap power from the St. Lawrence River, driving down electricity costs for residents, but it exceeded its allotted amount of hydropower in December and January, according to a local newspaper. Some complained that their bills surged as much as $300.

The city council said it needs time to consider zoning laws and lighting regulations “before commercial cryptocurrency mining operations results in irreversible change to the character and direction of the city.”

Want to Mine Bitcoin in New York? You’ll Have to Pay a Premium

http://fortune.com/2018/03/16/plattsburgh-new-york-bitcoin-mining-ban/
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March 17, 2018, 09:53:53 AM
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For a year and a half, the almost 20,000-resident city will not consider new applications for commercial cryptocurrency mining. And if you break the rules, you’ll owe Plattsburgh up to $1,000 for each day you violate the moratorium.

Mining, a process by which individuals or groups get paid in new Bitcoins to run complex mathematical equations on high-powered computers in order to confirm the validity of transactions, has drawn scrutiny from environmentalists who say it’s sucking up too much electricity. Some have estimated that Bitcoin miners will use more power than electric cars in the near term.


If you mine privately, is that still OK?
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March 17, 2018, 10:31:25 AM
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If you mine privately, is that still OK?
It all comes down to fair use policy I guess. If you take into consideration that their power supply is very limited at low cost, it's pretty understandable that they try to avoid situations where miners use up precious resources.

It would result in a situation where miners have no problems paying eventual premiums, but that will become a problem for their residents and local economy. I think it's safe to say that even privately mining won't be allowed.

If one person is doing it there won't be much of a problem, but what if a few hundred people do it at the same time? That will likely exceed the tolerance of fair use policy, and for that reason will likely be penalized.

And it's not an actual ban, but more a temporary halt from the looks.

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March 17, 2018, 11:48:20 PM
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It's not a ban. It's a temporary moratorium on new permit applications from mining businesses. It doesn't affect existing miners.

And it makes sense. The influx of miners coming for Plattsburgh's cheap electricity were bound to sap up the excess capacity and now it's affecting residents and local businesses. One miner interviewed in another article said miners would be happy to pay all overages to make sure residents are unaffected. I'm sure it's true. But the city needs to establish policies to reflect that.

Right now, the locals are just getting screwed.

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March 18, 2018, 12:31:06 AM
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@squatter. I don't really believe that miners would be happy to pay for all overages, whatever that would mean. Miners are like pirates and go wherever there's cheap energy.

Also, I reckon power companies are willing to pay the consumer for usage of excess energy in the form of discounts because energy cannot be efficiently stored. But the locals are not getting screwed, they are maybe mad because the miners are consuming all the discounts hehehe.


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Stegobit
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March 18, 2018, 04:27:00 AM
 #6

I think industrial miners will quickly find workaround by pretending data centers.
Imposing higher electricity tariffs on mining will never work as it is impossible to distinguish cryptocurrency miners who use GPUs and data centers who use them for scientific research, AI, deep learning etc.
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March 18, 2018, 09:22:27 PM
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@squatter. I don't really believe that miners would be happy to pay for all overages, whatever that would mean. Miners are like pirates and go wherever there's cheap energy.

Those were the words of a local miner, not mine. And happy was in comparison to being barred entirely from operation, I'm sure. That's what the moratorium means for new miners, and what it's threatening to do for existing miners. That's typical for medium/large-scale businesses that can afford a noticeable cut into their margins if it means they can keep operating.

Nobody's "happy" to lose profits in a literal sense. But you'd be surprised when it comes to large-scale businesses bending over to the man if it means legitimacy and permission to increase scale. The corporate behemoths taking over the cannabis industry in US states where it's legal now operate the same way. They scoff at a 10-20% cultivation tax because of the potential money they can make.

From another article:
Quote
“It would never cost the Plattsburgh citizens any more money to let more miners come in here because the miners are willing to pay for those overages when it's super cold,” Tom Pillsworth, a Plattsburgh local and partner at the second largest Bitcoin mine in the city, told Motherboard.

Also, I reckon power companies are willing to pay the consumer for usage of excess energy in the form of discounts because energy cannot be efficiently stored. But the locals are not getting screwed, they are maybe mad because the miners are consuming all the discounts hehehe.

How are residents not getting screwed? The miners are causing overages (i.e. there is no excess energy) which are being evenly distributed to residents just as they are to miners. They're not just "consuming the discounts." We're talking about publicly regulated utilities. If cities and public utility districts hold private interests over public, why do they even exist?

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