Moneycontrol
Last Updated : Mar 19, 2018 06:49 PM IST | Source: Moneycontrol.com

City bans cryptocurrency mining after residents foot higher electricity bills

The city’s two cryptocurrency mining facilities are being allegedly held responsible for this.

Moneycontrol News @moneycontrolcom

The city of Plattsburgh in the state of New York, Unites States has banned mining commercial cryptocurrency operations for 18 months in a move to protect residents from paying increased electricity costs.

However, it is believed that the ban will be short-lived as the Plattsburgh City Council sits to discuss and establish rules for commercial miners.

The ban came into effect after March 15th.

As per a report from Coindesk, the ban was enacted after it was observed that Plattsburgh exceeded its monthly electricity allotment earlier this year. This led to residents in the city seeing increased power bills in January. The city’s two cryptocurrency mining facilities are being allegedly held responsible for this.

Mining a cryptocurrency is a hardware intensive process which requires the computer or a user to solve a mathematical problem. Once a solution is reached, a transaction is validated and resultantly a new block is created in the blockchain which contains the information related to that transaction. As a reward for validating the transaction, a ‘miner’ earns a new set of cryptocurrencies – whatever that may be.

However, by design, not every solution will lead to a block creation. It is more like a lottery, where there will be several hits and misses. Hence, logically, the probability of success increases if the number of attempts is greater. This is what drives miners to try more and which again results in greater consumption of electricity.

Complaining about the problem one of the residents in the city pointed out that the burden shouldn’t fall on the people.

As per the report, councilors though said that 18 months’ ban is a long time and will have an impact on the business but others agreed that an action was needed to ‘stop the bleeding’.

The rules, so formed after 18 months, would focus on who pays for the raised charges.
First Published on Mar 19, 2018 06:49 pm
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