"We've Been Hearing A Lot Of Complaints" - City Passes First US Bitcoin Mining Ban | Zero Hedge
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# "We've Been Hearing A Lot Of Complaints" - City Passes First US Bitcoin Mining Ban

In sleepy upstate New York, one small post-industrial city has adopted what's widely believed to be the first bitcoin mining ban in the US. On Thursday evening, the city council in Plattsburgh New York voted unanimously to impose an 18-month moratorium on bitcoin mining, per Motherboard.

As we pointed out earlier this month, two large-scale bitcoin mining operations in the town had become a tremendous drain on the local utilities. This is a problem because,according to the Municipal Electric Utility Association, since the 1950s, the city is allotted a certain amount of inexpensive hydropower generated on the St. Lawrence River. Bitcoin miners are often drawn to areas with inexpensive hydro-power, like the Columbia River basin in the Pacific Northwest.

Mining is the extremely energy-intensive computational process that secures the Bitcoin blockchain and rewards miners with bitcoins, and increasingly, environmentalists are worried that the tremendous amount of energy required to power the bitcoin network could adversely impact the environment. Already, the bitcoin network uses more energy on a daily basis than many countries, including the Republic of Ireland...

The Bitcoin moratorium was proposed by Plattsburgh's Mayor Colin Read earlier this month after local residents began reporting wildly inflated electricity bills. But unfortunately for residents, the moratorium affects only new commercial Bitcoin operations and will not affect companies that are already mining in the city.

> "I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200," Read said. "You can understand why people are upset."

Thanks to a hydroelectric dam on the St. Lawrence River, Plattsburgh has some of the cheapest energy in the US - its mayor claims it's among the cheapest electricity in the world.

To wit, residents pay only 4.5 cents per kilowatt-hour (the US average is a little over 10 cents). Industrial enterprises, including Bitcoin mines, pay even less, often just 2 cents per kilowatt-hour.

But there's a catch: The problem is that Plattsburgh only has an allotment of 104 megawatt-hours of electricity per month. The biggest Bitcoin mining operation in Plattsburgh, operated by a Puerto Rican company called Coinmint, uses roughly 10% of the city’s total power budget.

The heavy power use forced city employees to purchase electricity on the open market in January at far higher prices. Those prices could be as high as 37 cents per kwh. That cost was distributed among city residents, with some paying between $100 and $200 more for their electricity that month. While this does occasionally happen during the frigid winter months, this year's winter has been relatively mild.

> "We could use 100 megawatts in two months’ time if we opened up the floodgates," Read told Motherboard. "And then there would be no cheap power left for our residents. Some of the proposals we’ve been seeing, they want to take 20 or 30 megawatt bites of power, and we don’t have that."

In the next 18 months, city officials promised to work with locals and newcomer miners to develop a solution. Read suggested a number of possible solutions, such as making miners pay for any overages, or increasing the rate for miners.

According to one miner, either of these arrangements would be welcomed by the mining community, which includes a few locals.

> "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. "The miners are more than willing to pay."

Now that China's crackdown on miners has created an exodus to other parts of the world, clashes between locals and miners in areas where hydro-electricity makes power cheap are bound to become even more common. Case in point: Miners in one Washington State town near the Columbia River are waging a kind of guerilla war against locals over their power usage.

But perhaps the Plattsburgh solution will become a template to help the two sides equitably distributed electricity resources before miners are banned from the US, too.

* * *

The State of New York is already fighting back. Case in point: the New York Public Service Commission on Thursday took action to stop miners from taking advantage of the cheap hydroelectric power found in several places upstate, according to Bloomberg.

"If we hadn’t acted, existing residential and commercial customers in upstate communities served by a municipal power authority would see sharp increases in their utility bills," Commission Chair John Rhodes said in a statement.

The agency is made up of 36 municipal power authorities in the state. In some cases, the miners, which require huge amounts of electricity for data processing, accounted for a third of a municipal utility’s demand, the commission said.

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ted41776 Fri, 03/16/2018 - 16:49 Permalink

fuck "people are upset" and fuck their feelings. if you're not the one paying for it, shut the fuck up and mind your business. are their electic meters broken? are they the ones paying for it? why do they care about what others are consuming?

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Buckaroo Banzai ted41776 Fri, 03/16/2018 - 16:52 Permalink

Yes actually, if you read the story, they are the ones paying for it.

Plattsburgh is an extreme outlier case, the difference in cost between their base-load electricity and their peak-load electricity is probably the biggest in the country.

Not the best place to locate a crypto mining operation.

In reply to are their electic meters… by ted41776

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ted41776 Buckaroo Banzai Fri, 03/16/2018 - 16:55 Permalink

don't care, they should fix their billing model then. if they're paying for consuming a product or service, it's their business how they consume it and what they do with it. as long as their bills are paid i don't care if they have a hundred space heaters outside their house trying to warm the planet because they believe manmade climate change is making it too cold and killing polar bears. it's their money and what they do with the service they purchase is their business and no one else's. just because the utility company is too stupid to figure out the correct way to price their service doesn't mean those paying for it should be told what to do. if this law passes i would totally be the guy with a hundred space heaters in my driveway and a giant foam middle finger with a sign saying "people are upset"

In reply to Yes actually, if you read… by Buckaroo Banzai

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stacking12321 ted41776 Fri, 03/16/2018 - 16:57 Permalink

problem: city isn't capable of managing resources intelligently.

solution: pass a law restricting the rights of citizens.

In reply to don't care, they should fix… by ted41776

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glenlloyd stacking12321 Fri, 03/16/2018 - 17:00 Permalink

Yeah....apparently they are paying for it because of the low cost hydro limitation...

In reply to pro by stacking12321

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ZENDOG glenlloyd Fri, 03/16/2018 - 17:02 Permalink

Boot them Bitcoin Fags out of the city or just burn their operations to the ground.

In reply to Yeah....apparently they are… by glenlloyd

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AnonymousCitizen ZENDOG Fri, 03/16/2018 - 17:12 Permalink

Demand Electricity Neutrality laws now!!!

I have this device that requires 1.21 GW of power...don't tell me I'm not allowed to use it.

In reply to Boot them Bitcoin Fags out… by ZENDOG

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Bastille Day ted41776 Fri, 03/16/2018 - 16:56 Permalink

Yes they are paying for it. The city is allotted so much energy really cheap and when they go over, they have to buy really expensive electricity in the open market. The miners are pushing them over their allotment and thus everyone has to pay a higher rate.

In reply to are their electic meters… by ted41776

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joego1 Bastille Day Fri, 03/16/2018 - 17:01 Permalink

Crypto is a good idea but Bitcoin has an obvious flaw in it's architecture.

In reply to Yes they are paying for it. … by Bastille Day

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nakedhedgehog ted41776 Fri, 03/16/2018 - 17:01 Permalink

Hey dumbfuck, the people are the ones paying for it because their is a fixed allotment from the local power generator and anything above that has to be purchased on the open market at a MUCH HIGHER PRICE. CAN'T YOU MORONS FUCKING READ?

Get off the net and watch your dumbfuck TeeVee.

In reply to are their electic meters… by ted41776

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TheSilentMajority ted41776 Fri, 03/16/2018 - 17:06 Permalink

“Bitcoin mining”

LMAO

In reply to are their electic meters… by ted41776

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lester1 ted41776 Fri, 03/16/2018 - 17:15 Permalink

Bitcoin mining is the most ridiculous thing out there. Some of you people seriously live in Fantasyland. All that energy wasted for a computer code? Lol

Vote me down if I hurt your feelings..

In reply to are their electic meters… by ted41776

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Robert Trip ted41776 Fri, 03/16/2018 - 17:17 Permalink

Fuck you.

I hope those greedy mining bastards all rot in Hell if they don't get electrocuted first.

Be a few less snot-nosed tech geek motherfucking assholes on the planet.

In reply to are their electic meters… by ted41776

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phatfawzi Fri, 03/16/2018 - 16:49 Permalink

and how much energy does it take to grow marijuana.

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3LockBox phatfawzi Fri, 03/16/2018 - 16:53 Permalink

Not much if you use the sun.

In reply to and how much energy does it… by phatfawzi

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Buckaroo Banzai phatfawzi Fri, 03/16/2018 - 16:53 Permalink

"But that's just the free market in operation, goy! Now go ahead and rip that bong and keep your eyes glued to the Electric Jew!"

In reply to and how much energy does it… by phatfawzi

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Anonymous_Bene… phatfawzi Fri, 03/16/2018 - 16:53 Permalink

Not much at all. Sunlight is practically free :)

In reply to and how much energy does it… by phatfawzi

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alurker phatfawzi Fri, 03/16/2018 - 16:55 Permalink

exactly. maybe they should just have an application process to use electrical power. Force consumers to prove their power use is for 'noble' causes. Then empower neighborhood snitches to look inside windows for examples of illicit use - i.e. TV's on all day showing cnn.com

In reply to and how much energy does it… by phatfawzi

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ToSoft4Truth Fri, 03/16/2018 - 16:53 Permalink

All that aluminum production coming back will need a lot of electric too.

" Because smelting requires significant amounts of electricity, some primary aluminum smelters can be found in areas with lower-cost electricity, often in areas with rich hydroelectric resources, such as the Pacific Northwest and Upstate New York. However, other smelting plants can be found in the Midwest, Appalachia, and Texas. New primary aluminum smelters are not expected to be built in the United States, although existing ones are expected to increase capacity utilization or expand production capability. "

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Buckaroo Banzai ToSoft4Truth Fri, 03/16/2018 - 16:55 Permalink

Given how cheap natural gas is thanks to shale oil, it's not really going to be a big problem

In reply to All that aluminum production… by ToSoft4Truth

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ZENDOG ToSoft4Truth Fri, 03/16/2018 - 17:01 Permalink

That's why Rio Tinto, and a few others are in Iceland......it ain't for the Beaches......

No new Alum Smelters will be built in the USA.....ever.

In reply to All that aluminum production… by ToSoft4Truth

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besnook ToSoft4Truth Fri, 03/16/2018 - 17:17 Permalink

the eisenhower damn on the st laurence river in massena ny was home to alco's biggest plant in the usa for a long time. they were cutting back or closing was the last i heard but the infrastructure is there. thats about 120 miles west from plattsburgh.

In reply to All that aluminum production… by ToSoft4Truth

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Best President Ever Fri, 03/16/2018 - 16:55 Permalink

Fuck off and move out.

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Anonymous_Bene… Best President Ever Fri, 03/16/2018 - 16:59 Permalink

nickpeeme?

In reply to Fuck off and move out. by Best President Ever

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enfield0916 Fri, 03/16/2018 - 16:58 Permalink

Bitcoin is to currencies what Tesla is to cars, cheaply made and poorly planned ponzi schemes that drain resources at the expense of others.

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Liquid_Silver enfield0916 Fri, 03/16/2018 - 17:03 Permalink

what a moron! lol unreal!

In reply to Bitcoin is to currencies… by enfield0916

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you_are_cleared_hot Fri, 03/16/2018 - 17:01 Permalink

Why do I think Al Gore has a sizeable Bitcoin investment...oh the irony.

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Labworks Fri, 03/16/2018 - 17:02 Permalink

Zerohedge being the number one mouthpiece for the electronic enslavement system called blockchain, it comes as no surprise to me that the article is all sad.

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redd Fri, 03/16/2018 - 17:06 Permalink

the dollar and wall street are seeing the last days of _ _ _ control

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Nature_Boy_Wooooo Fri, 03/16/2018 - 17:06 Permalink

Arizona is friendly to miners.

2nd FUD article about power usage today. Lots of FUD from Zerohedge the last few weeks, the Tyler's must have sold or have taken a short position.

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MsCreant Fri, 03/16/2018 - 17:08 Permalink

Bitcoin is not sustainable. It is fiat currency. It depends on electricity for its production and exchange and storage.

[Sigh!]

It might be something great to speculate on as the price rises and falls, but it'll all eventually come up tulips. So bubbly! So bursty.

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redd Fri, 03/16/2018 - 17:08 Permalink

how it plays out is, purchases of large amounts of weapons and munitions shipments paid via crypto by revolutionary American forces sent to allied anti-semite countries

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besnook Fri, 03/16/2018 - 17:14 Permalink

the problem will be solved by the market in a few months when the shit coins are declared illegal without official sanction. the end is visibly near now.

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ArmchairQB Fri, 03/16/2018 - 17:15 Permalink

CryptoBS should be banned. It is like torching natural resources for game points.

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Drop-Hammer Fri, 03/16/2018 - 17:15 Permalink

Jesus, what a jew scam. Running gobs of computers to win 'Bitcoins' which are not real and exist only in some computer's memory. Sounds like those computer games like Super Mario in which the game characters win their little gold coins/tokens. More jew buncombe.

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