Is New York’s crypto opportunity at risk?

Mike Colyer

Building Foundry — the fast-growing Western New York-based digital currency company — has been one of my biggest honors. As a native of the region, it has been a joy to give back by steering such an innovative company in this community. Foundry is special, not just because we are at the forefront of a massive technological revolution, but because of our 117 employees. They are some of the smartest and most energetic people I’ve had the pleasure of knowing and, as we continue to build, they represent the future of this place we all call home.

At Foundry, as at similar organizations Statewide, we have been able to create salaried positions that rival Silicon Valley tech firms. Our work positions Western New York to become a central technology hub and has already garnered international recognition for the caliber of our workforce and innovation.

This is why I find it especially upsetting that some New York State legislators are attempting to tear down what we have created, as well as our burgeoning industry, by proposing A.7389C / S.6486C. If passed, this “moratorium bill” would suspend most forms of cryptocurrency mining in New York State for two years, which is a lifetime in the tech industry. This bill stems from misunderstood and ill-conceived conceptions of cryptocurrency and its mining effects.

Correcting this narrative and understanding the importance of Bitcoin and other cryptocurrencies is essential to helping the Empire State thrive in an increasingly digital economy.

The bill results from misinformation regarding energy consumption required by Bitcoin mining — claims built on fear and devoid of context. Mining is the process of verifying transactions and securing the network that powers Bitcoin’s digital ledger, known as a blockchain.

Unlike a traditional bank, wherein a network might be housed in servers residing in a handful of buildings, Bitcoin’s network exists on thousands of computers in hundreds of countries. Keeping Bitcoin’s blockchain secure and running does require energy, but that allows the decentralized network to operate with no authoritarian control, thereby democratizing the flow of capital. Despite the technological feat of creating this massive, decentralized network, Bitcoin mining remains less energy intensive than the high frequency trading machines used on Wall Street.

Likewise, Bitcoin is becoming greener. Already, 73% of the industry is employing carbon neutral energy sources.[1] Foundry, along with many of our peers, is part of the Crypto Climate Accord, agreeing to be 100% carbon neutral by 2040. This pledge puts us on the same carbon neutral time horizon as Amazon, Procter & Gamble, and Hewlett-Packard.

Should Albany lawmakers craft digital currency-related policy with too heavy a hand, New York will once again miss out on technology that promises investment, employment, and revenue that can lead to statewide gain.

To draw a comparison, had policymakers heavily legislated the Internet in the 1990s, the U.S. would have missed the opportunity to be at the forefront of this massive technological advancement. They approached the topic with a light touch. This allowed the U.S. to lead the world in connectivity, creating whole industries and making existing ones more efficient.

The cryptocurrency sector, and the underlying technology powering it, has that same potential to transform current industries as we know them. I believe New York State can be at the forefront of those changes.

However, we risk myopic legislation that focuses on one part of the broader story, toying with the future of crypto-centric businesses and blockchain advancement from Buffalo to Brooklyn. By putting a two-year hold on crypto mining, New York would signal that the state is closed to business for this promising and already proven technology. Other states will readily adopt this emerging industry, recruit our residents, and take the significant tax revenues and other fiscal benefits associated with the sector. We cannot allow that to occur unchecked.

Instead, let’s work to educate our legislators about the power of this technology and dispel unwarranted fears. Only then can we craft sound policy that spurs the economic and technological advancements that New York State and our communities richly deserve.

Michael Colyer is CEO of Foundry.

[1] Bendiksen, Christopher and Gibbons Samuel. “The Bitcoin Mining Network: Trends, Consumption, Average Creation Cost, Electricity Consumption & Sources.” Coinshares.com. December 2019.