The city of Plattsburgh in New York is the first municipality in the nation’s history to outlaw bitcoin mining within the city’s limits. The city council explained that the operation is very energy-consuming which has led to higher electricity bills for all local residents last month.
The protests prompted Plattsburgh Mayor Colin Read to get to the bottom of the problem and ban bitcoin mining. The new rules will affect only residents or companies that will start the operation after the law passed.
The mayor noted that some residents’ electric bills jumped from $100 to $200, which made many of them upset. It is worth noting that the city boasts the cheapest electricity on the planet, with just 4.5 cents for one kilowatt-hour. This is because most energy is generated via a nearby hydroelectric dam.
Even though the lower rates were designed to lure in more companies, bitcoin miners took the opportunity too. Bitcoin mining needs a lot of electricity to make a profit.
The issue is that the city has a monthly power budget of 104 megawatt-hours. Ten percent of that budget was drained by the biggest bitcoin mining company in the city, Coinmint, over the last two months.
Bitcoin Mining Operations Inflated Residents’ Electricity Bills
Because of the shortage, Plattsburgh purchased power from third-parties which inflated electricity bills for all local residents. People started paying up to $200 more than they used to.
City residents are concerned that cheap power could attract more bitcoin miners and further inflate their bills. This could make Plattsburgh’s energy less cheap.
Mayor Read explained that if miners used the city’s power budget in two months, there would be no cheap energy for people. Some companies reportedly want to consume up to 30 megawatt bites, which is too much even for a city.
The municipality also plans to make bitcoin miners pay for the extra energy that needs to be purchased from third-parties or to hike the energy rates for miners.
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