Well, it was only a matter of time until municipalities, provinces or even countries start to ban cryptocurrency mining.
In Plattsburgh, the ban just happened last night (Mar 15, 2018). City council decided to put it in place because the power
bills of home owners and business owners has skyrocketed due to the demand for power that cryptocurrency miners require.
The reason why so many miners have been setup in the city of Plattsburgh? Well, in most of the United States, the cost for
electricity is about 10 cents per kilowatt-hour. However, in Plattsburgh, the cost of power is less than half of that – 4.5
cents/Kwh. To top it off, there’s an incentive for industrial companies, like factories and manufacturing – they pay an astounding
2 cents. This is so low. Furthermore, it’s not like it is here in Canada. Here, we have three different times throughout the day
where the hydro company can just brutalize us if we run expensive equipment (like miners) in peak periods.
In Plattsburgh, you’re paying an even 2 or 4.5 cents/Kwh no matter what time of the day it is. Amazing.
This has lead to companies like Coinmint taking up residence in Plattsburgh. If you can get power this cheap, obviously the incentive
is there for businesses such as Coinmint to move in and setup shop. In the mining world, the cheaper you can find power, the
more money you can potentially make on daily mining operations. In places where the cost of power is 10 cents per Kwh and higher
(like in Ontario), the concept of mining becomes a far fetched one – you simply can’t break even unless you’re willing to build
some very powerful machines.
Another consideration is that after 1500 watts or so, you also need special outlets to power these miners. So the concept here is that
many miners will build systems with 6 GPU’s, because that’s generally the max you can get away with without requiring a special
outlet and a much larger power supply.
It’ll be interesting to see though, how Plattsburgh enforces this actual policy. There is no real way to enforce it unless
they are willing to invest in an expensive solution which can do packet checking. All ISP’s that operate in that city would
also need to setup and install costly hardware. At the end of the day, it’s more likely that the venture of banning
Cryptocurrency will actually outweigh the amount of energy cost that people are paying in the city. No official comment has been made as to how the city will implement the ban, other than they “plan to work with local cryptocurrency mining companies.” Sounds more like a compromise than a ban, really, and furthermore it’s very possible that Coinmint may sue the city over this one as it sounds like the city is trying to close their business. This would be a breach / overstepping of what a municipal entity can actually impose on it’s citizens.