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New York town imposes 18-month ban on Bitcoin mining for new commercial operations

By Shawn Knight ยท 36 replies
Mar 16, 2018
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  1. Cryptocurrency mining can be a lucrative endeavor but there are a few caveats to be aware of. Namely, it demands a lot of electricity which in turn generates tons of heat. It’s no surprise, then, that those looking to get the best return on their investment seek out locations with cheap electricity and / or a cool climate.

    The freedom to pick and choose your mining location isn’t really an option for individuals mining on a spare computer in their bedroom but for professional operations, location can be paramount. Find a spot with cheap electricity and a cool climate and the potential profit margins swing in your favor.

    Residents in one New York town are fed up with professional mining operations and have convinced local officials to do something about it.

    Plattsburg, New York, is an attractive destination for commercial Bitcoin operations. According to Mayor Colin Read, the city offers the “cheapest electricity in the world” thanks to a nearby hydroelectric dam on the St. Lawrence River. Here, residents pay just 4.5 cents per kilowatt-hour and industrial enterprises (like commercial Bitcoin operations) are billed just 2 cents per kilowatt-hour compared to the US average of 10.27 cents per kilowatt-hour.

    Unfortunately, even with the renewable energy source, the supply isn’t endless. The town has an allotment of just 104 megawatt-hours per month. When you’ve got one mining operation consuming roughly 10 percent of the supply, well, that’s a problem.

    In January, the city went over its allotment and had to purchase more electricity on the open market at an inflated rate. The cost, of course, was passed along to consumers.

    As Motherboard highlights, residents in Plattsburg began complaining in January when their electric bills soared. According to the mayor, some bills went up by as much as $200. This prompted Read to propose an 18-month Bitcoin moratorium earlier this month and on Thursday evening, the local city council approved the proposal.

    It’s not unusual for the city to go over its allotment of cheap electricity in the winter months but locals are worried that if more miners come to town, the affordable electricity will dry up for good.

    Notably, the moratorium affects only new commercial Bitcoin operations. Those who are already operating in the town aren’t impacted. In other words, they’re simply looking to deter new operations from setting up shop until a solution to the excess energy usage can be worked out.

    Bitcoin's value is down to around $8,500 per at the moment but peaked earlier this year at more than $18,000.

    Over the next 18 months, the city aims to work with citizens and professional mining operations on how to solve the issue. The mayor suggested several possible solutions including increasing the rate charged to miners or having them pay for any overages. Local miners are said to be against the ban but are willing to work with the city on a solution.

    With precedent now set, it’ll be interesting to see if any other cities follow suit and impose similar bans on professional mining outfits.

    Permalink to story.

     
  2. Wouldn't be surprised if it was a commercial miner (or group of them) who pushed this forward. Move into the cheapest market, then lock out competitors via regulation. Classic corporate chess.
     
    Theinsanegamer and Rockstarrrr like this.
  3. wiyosaya

    wiyosaya TS Evangelist Posts: 3,071   +1,548

    IMO, the miners should have to pay the extra charges over and above what the residents pay in the area. In no way is it fair that the residents of the area should have to subsidize the miners as they are currently doing by paying extra for electricity that the miners are using.
     
  4. Jroc187

    Jroc187 TS Enthusiast Posts: 30   +14

    As a power company, I would start charging residents a big surcharge if they are using x amount of power over what everyone around them is using.
     
  5. Uncle Al

    Uncle Al TS Evangelist Posts: 4,433   +2,889

    Most power companies have a tiered billing structure that separates residential from commercial with commercial carrying the bulk of the high dollar loads. It's somewhat self regulating since "peak periods" are during normal business production hours but these are further separated by delivery agents. Because of deregulation, power can be bought from a variety of suppliers over the entire network. While the network that delivers doesn't like cheaper power coming through them, they have no choice. One of the major weaknesses are cities and towns that simply don't understand the ability to purchase their own power outside of their hometown supplier so they get roped into high costs, etc. With so many seminars out there dealing with this, it's hard to understanding a city NOT being up to date, but of course, it can and does happen ......
     
  6. yRaz

    yRaz Nigerian Prince Posts: 2,648   +1,879

    I live in Pittsburgh and I pay 10.35/Kwh for renewables instead of the standard 7.85. if I'm going to make free money the least I can do is be enviormentally friendly. I'm a degenerate but not THAT much of a degenerate.
     
    Theinsanegamer and Uncle Al like this.
  7. wiyosaya

    wiyosaya TS Evangelist Posts: 3,071   +1,548

    We have had the ability to buy power from elsewhere, and in our area, at least, the primary provider of power is the least expensive. For us, the ability to purchase power from elsewhere is, essentially, meaningless and steeped in marketing claims that are less than factual.

    The article explicitly states that there is a hydroelectric dam in the area, and that is the primary reason that their rates were inexpensive in the first place. Typically, that is the case. Hydroelectric is cheaper than electricity produced via other means.

    It is easy to say that they should be looking elsewhere for cheaper power, however, they may have already done that. Since hydro is an inexpensive option in the first place and likely in demand since it is so inexpensive, the dam may have already sold all of its generating capacity, and thus, the town had to look elsewhere for power. I would not be surprised if the other available sources were significantly more expensive.
     
    Theinsanegamer and Boilerhog146 like this.
  8. Mighty Duck

    Mighty Duck TS Addict Posts: 131   +68

    Is that an AT-AT on that Krasnoyarsk dam picture?
     
    Reehahs and RevD14 like this.
  9. kapital98

    kapital98 TS Maniac Posts: 311   +238

    I've personally worked with the county government here. This is not a case of backroom deals.

    This is the largest and most sparsely populated counties in NY state (the county is larger than some small states). The people are extremely poor and cannot afford increases in electricity bills. Neither can the local Department of Social Services -- where many of them recieve aid.

    Edit: This is also pretty funny form a political side of things because every level of government in St. Lawrence County is Republican. The population is about 60/40 republican. So it's not like this is some socialist plot or really even crony capitalism (since most of the major industries left long ago).
     
  10. regiq

    regiq TS Addict Posts: 203   +80

    I think that sky rocketing electricity usage is a proof that artificially rising the block difficulty is a bad concept for the future of blockchain. Majority of energy is wasted on bad hash guessess. Very unelegant from a technical point of view, to say the least.
     
    Theinsanegamer and mbrowne5061 like this.
  11. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 10,799   +4,605

    They should set it up so the minors (all of them) pay the inflated rate, when the city goes over its allotment. And if that is not enough to cover expenses, double their inflated rate.

    That is precisely what happens when a company produces more traffic and starts to put excess wear on the road, they are expected to pay a larger tax for repairs.
     
  12. MaikuTech

    MaikuTech TS Guru Posts: 888   +158

    Good its about time miners started to pay a price or two for using up so much energy.
    With the recent winter storm that hit them recently I don't blame them for taking actions like this.
    When massachusetts and new hampshire bounces back from the power outages soon.
    I wouldn't be surprised if they follow the lead of new york to keep things in order.
     
    wiyosaya and Boilerhog146 like this.
  13. Boilerhog146

    Boilerhog146 TS Evangelist Posts: 617   +217

    I Never saw this coming.
    here is the original article .
    https://motherboard.vice.com/en_us/article/8xk4e4/bitcoin-ban-plattsburgh-coinmint-mining
    who's next?

    There is no such thing as free money,if your making income from mining it is supposed to be declared and taxes paid, otherwise , its income tax evasion ,simple ,yes/no? @yRaz

    most of the profit from said operation is going elsewhere, not in the community where the mining is taking place .Tax them out of existence .IMO. let the moneys stay local. to improve the community.
    Capturing the heat and utilizing it should have been part of the plan right from the start. but who cares about the poor local residents anyway.?
     
    wiyosaya likes this.
  14. yRaz

    yRaz Nigerian Prince Posts: 2,648   +1,879

    I pay my taxes. when I say "free money" I mean money that requires no work to make. Not every miner is a tax evading degenerate. I'm also getting tired of people saying miners are horrible people and hope they go broke. The ill will isn't on the side of the miners, it's on people like you. You're the bad person, not me. I pay taxes and I pay an extra ~$0.02/kw for the electric company to invest in renewable energy.
     
  15. Reachable

    Reachable TS Evangelist Posts: 309   +156

    What a freakin' huge waste of precious energy! All for greed, and nothing else. Don't just ban new 'miners' from coming in -- run the old ones out of town!
     
  16. Boilerhog146

    Boilerhog146 TS Evangelist Posts: 617   +217

    I happen to believe it is crony capitalism,meaning the profit is unregulated,no one knows how much profit there is and its going overseas to an offshore account.,while the poor locals are getting their power bills inflated.. I don't see a good way of looking at it.

    it's also funny when another capitalist ,says ,NOT ME ,I'm not like that,,LMAO. yes ,MY BAD.
     
    Theinsanegamer and wiyosaya like this.
  17. regiq

    regiq TS Addict Posts: 203   +80

    The blockchain tech could be used for things we can't imagine yet and it will stay with us, but - as I wrote eariler - the algorythm which lowers efficiency with the rise of network processing power is a grim joke.
     
  18. wiyosaya

    wiyosaya TS Evangelist Posts: 3,071   +1,548

    I agree that it is inefficient, however, I'll add that we have all heard that blockchain is the answer to problems that have not yet occurred. Until those problems occur, that blockchain is the solution to those problems is speculation.
     
  19. wiyosaya

    wiyosaya TS Evangelist Posts: 3,071   +1,548

    Well, technically, it does require work to make it because one has to have a source of money to buy the equipment in the first place.

    Personally, I am glad that you are following the rules. Not all people do, and I like to think that there are some decent people out there still.

    You are riding it while you can. Enjoy!
     
    Theinsanegamer and Boilerhog146 like this.
  20. Boilerhog146

    Boilerhog146 TS Evangelist Posts: 617   +217

    The thing that irks me the most about all the blockchain this and blockchain that,is the plain, simple ,fact that no matter who or what or where ,a mining op is set up.its about the money to be made ,not 1 bit about the actual blockchain ,or its potential for bettering humanity.and they all want it to stay as secret and secure ,for no obvious reason that I can see. other than to hide the profit and who is profiting.
    The blockchain has been under development for some years now ,show me a constructive use for it already.even the guy or guys that started it don't want to be found out,don't want to be credited for such a wonderful thing?there's something wrong with this picture.
     
    Last edited: Mar 17, 2018
  21. yRaz

    yRaz Nigerian Prince Posts: 2,648   +1,879

    There are coins used for cloud storage, like siacoin and others that can be used as a cloud-like super computing service. In that case the mined coins come people from buying computing time on your computer with crypto.

    One that I'm particularly fond of is ETHOS which is basically a new approach to the internet.

    I understand people's frustration with large scale mining operations but it seems kind of wasteful from an infustructure standpoint to have all these cards idling in people's computers not being used. Block chain can turn all that computing power into something useful.

    Bitcoin and many other coins that don't actually provide a service are useless and worthless in the long run. Bitcoin, as an idea, was successful. However, the underlying flaws prevent from actually being used as a currency.

    I will add that cryptos with a finite supply are theoretically better than fiat currencies. The same thing that gives paper money value is the same thing that gives crypto currencies value, they have value because we say they do
     
    regiq and Boilerhog146 like this.
  22. captaincranky

    captaincranky TechSpot Addict Posts: 13,931   +3,304

    This is oddly not without precedent, but in a slightly different way. Once upon a time, when a person or place's electric bill skyrocketed, the police would be notified by an electric company, for possible indoor marijuana farming. Search warrants often ensued.

    A big part of this is, (supposedly), already figured into the road use taxes on diesel fuel and licensing fees.

    Of course whether or not the funds actually get used for those purposes, is an entirely different matter.
     
    Boilerhog146 and cliffordcooley like this.
  23. Evernessince

    Evernessince TS Evangelist Posts: 3,194   +2,429

    "According to the mayor, some bills went up by as much as $200. "

    Holy smokes, I guess these people were too use to cheap power. The electric isn't cheap where I live and I wouldn't say I'm conservative with 5 computers on at all times and my bill isn't even $200 total.

    I'm all for miners using as much electricity as they want so long as it isn't causing other people's bills to go up. I did like the idea of having heavy electric users pay into an alternate energy fund.
     
    Boilerhog146 and cliffordcooley like this.
  24. yRaz

    yRaz Nigerian Prince Posts: 2,648   +1,879

    The few rich people In the community probably complained, the lower class probably only saw a $10-20 increase. I'm mining on 12 GPUs and my electric bill doesn't exceed $200. Typically $160-170. The cost is further offset by not having to use gas to heat my house but that's only like a $20-30 a month increase in winter. Aside from my fridge and a microwave I hardly use the only electronics I have running iny house are a 65"LED backlit TV and 3 computers, 2 of which are full time mining rigs.

    I really want to see what they're paying per Kwh because I'm paying 10.35 cents per Kwh for renewables
     
    Last edited: Mar 17, 2018
    Evernessince likes this.
  25. Boilerhog146

    Boilerhog146 TS Evangelist Posts: 617   +217


    good info ,I did a bit of reading. and I have to admit there are some legit uses .but I still think its more for the money as opposed to bettering our species.most are supporting the idea for the wrong reasons.and populations are paying for it ,that can't afford it,hence my belief in regulating the process.preventing what is happening in small towns like those in the link and others I've read about.
    if you are indeed legit ,then I regret offending you .but you must understand my distaste ,for outfits that have all the profit unaccounted for and it leaving the country through offshore accounts. I have a 270.00 power bill this month with one single gpu ,pc running .and game a few hours per day on it,we have a new Dam being built in Labrador ,muskrat falls ,and our power bill is going to go up even more .not down.:mad:
     
    Last edited: Mar 18, 2018

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