Plattsburgh, a city located in northern New York State in the US, has decided to place an 18 month moratorium on cryptocurrency mining because of energy usage concerns.

Coinmint is the largest miner within the city and used about 10 percent of the city’s energy supply in January and February. Plattsburgh Mayor, Colin Read, said he heard “a lot of complaints that electric bills have gone up by $100 or $200” USD and that regulations on commercial mining were needed before there is an “irreversible change to the character and direction of the city.” The city will consider all “server farms” as “three or more interconnected computers housed together” whose primary purpose is to “perform cryptocurrency mining or associated data processing.” The city will leverage a fine of no more than $1,000 USD for each day an individual or business is in violation.

The cheap electricity of Plattsburgh attracted cryptocurrency miners since residence pay $0.045 USD per kilowatt-hour and the city government offers a discounted rate to industrial enterprises of $0.02 USD per kilowatt-hour compared to the average of $0.10 USD per kilowatt-hour throughout the rest of the United States. Plattsburgh does not have an open market of electricity and instead receives an allotment of 104 megawatt-hours of electricity per month. So when the city usage went over the monthly allotment, they had to leave their controlled environment and purchase extra electricity on the open market. The increased price was then distributed among all users.

Doubts around accusation and enforcement

The recent alarm over the energy usage of Bitcoin and cryptocurrency mining tend to stem from one particular study that has had its data and conclusion called into question. The Digiconomist study relies on calculating Bitcoin’s energy consumption by backing it out from estimating miners’ revenues and expenses. Jonathan Koomey, a Stanford University lecturer who pioneered electrical usage studies for IT equipment and helped debunk deficient forecasts for IT and internet in the 1990s, says Digiconomist’s methods introduces “multiple layers of error and uncertainty” and is a “completely unreliable way to do the analysis, and no credible energy analyst would ever do that.” Other studies also believe cryptocurrency’s energy usage is much smaller and recalls the faulty internet energy usage predictions of the 1990s that overestimated usage by at least a factor of eight. Then even when ignoring the macro picture and focusing on the micro issue of the small town effects, Plattsburgh’s policies seem to raise some more issues.

Plattsburgh mentions what qualifies as a cryptocurrency miner, but does not significantly elaborate on how they plan to realistically detect and enforce the ban other than through fines. Since there are many reason why a citizen or business can have large energy consumption other than cryptocurrency mining, the town will have to search every building that is registering above “approved” energy usage. This will eventually lead to warrant requests and demands to stop mining that must be reconciled with Bernstein v. Department of Justice, which ruled that computer code is free speech. Cryptocurrencies are made up of computer code distributed via the internet, which seems to place the ban into a grey area. Cryptocurrency mining found its way into Plattsburgh and the city’s cheap electricity because of market decisions and cryptocurrencies will also use market decisions to find its own solution.

Dash evolves over time to suit democratic desires

Dash, with a combination of miners and masternodes has a unique incentive and governance system to encourage and implement changes that are heavily desired by the most Dash users. If Dash’s energy consumption ever becomes detrimental, which many signs point to naught, and Dash community users really demand a more energy efficient cryptocurrency, then Dash has the tools to evolve and satisfy those changes. Just as when Bitcoin’s network became clogged with users and transaction fees skyrocketed, Dash was able to smoothly, without a hard fork, upgrade to larger blocks and reduce transaction fees even further.

Dash has the ambition to follow in cryptocurrency’s original goal of helping people around the world that are disillusioned with the current banking and financial system. As social responsibility becomes a top priority as well, the Dash community will meet those desires just as it is currently doing with Venezuelans.