Addressing the “right to mine” crypto

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 tide is turning. Now, after the Biden administration recommended more regulations and Sen. Ed Markey (D-Mass.) introduced a bill to crack down on industry’s massive energy use, industry seems alarmed — and retaliates, tripling spending on Capitol Hill lobbyists. Some groups are doubling down on Capitol Hill, pushing “Right to Mine” bills in states across the country. These bills, with purported bans on localities adopting zoning and noise ordinances for cryptocurrency mining, would cripple or at least severely chill communities’ rights to govern and protect themselves from for-profit interests. They give big companies (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 ordinary people at home, mining Bitcoin on their laptops. But that type of mining is only a small minority, because the more computing power you have, the more Bitcoin you can earn, and mining requires more and more energy over time. Now, mining is primarily profitable for large companies with the means to stock tens of thousands of specialized 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 just the 10 percent of miners, and just 0.1 percent — about 50 miners — control half of all mining capacity. Make no mistake, Right to Mine bills are designed to protect big 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, NC, described the noise as “like living on top of Niagara Falls,” and near Niagara Falls itself, locals complained that local cryptocurrency mining was literally drowning out the sound of the falls. There, they won a zoning ordinance — the kind of community self-protection that can be illegal under a state’s right to mine law.

Right to Mine bills also appear to seek to protect miners from fair electricity pricing on cryptocurrency miners – even though cryptocurrency mining often ends up costing others unfortunate enough to share the energy utility. Because these plants are so energy intensive, they can require new transmission and distribution lines, infrastructure upgrades and more. For example, in Paducah, Kentucky, Blockware Mining received $12.7 million in transmission upgrades, which increased regular consumer bills to pay for the upgrades. It’s also common for a cryptocurrency mining operation to just up and leave, leaving the locals with the bag. In Washington, a cryptocurrency mining operation that went bankrupt in 2018 left locals to cover their $700,000 in unpaid bills. That’s a net negative for these communities, especially because cryptocurrency mining is notorious for promising economic development and new jobs without usually delivering.

The cryptocurrency mining industry also wants you to believe that it is cleaning up power grids and doing everything it can to fight climate change. Don’t fall for it. Cryptocurrency miners seem to find the cheapest energy they can find, wherever they can find it, regardless of how dirty it is. In Missouri, House Bill 764, currently moving 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 would prevent more local governments from passing helpful regulations like those in Missoula County designed to protect local communities and the environment from mining’s negative impacts. Mississippi—another state where a Right to Mine bill recently passed the Senate—has a gas-dominated grid. All of these states are moving legislation that will increase America’s carbon footprint at a time when we need to be laser-focused on reducing it where we can.

The kicker? Cryptocurrency does not have to come at the expense of our environment. Proof-of-work cryptocurrency mining is far from the only way to validate cryptocurrencies – other methods do not have exorbitant energy requirements, nor the other environmental impacts. So it is entirely possible for policy makers to be pro-crypto and pro-business without being anti-community and anti-local governance. In fact, the local business community in New York State pushed for the cryptocurrency mining moratorium because the negative impacts of mining threaten their rural, agricultural livelihoods. The federal government cannot shy away from regulating this industry, and states looking to do the same should look to Washington State as a model, where House Bill 1416 would 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, and create more sustainable food and agricultural practices.