It’s been a volatile year for cryptocurrencies, with several ups and downs over several months. But despite some setbacks, Bitcoin and other digital currency are expected to be the future. Companies like PayPal are increasingly expanding their markets to provide cryptocurrency services. And digital coin enthusiasts see it as the obvious next-step in finance. But that doesn’t mean there aren’t challenges ahead for the cryptocurrency world. Notably, energy and environmental concerns are among the foremost cryptocurrency mining problems currently. But that doesn’t seem to be deterring too many bitcoin mining farm companies thus far. In fact, quite the opposite is true.
Throughout the country, cryptocurrency mining companies are securing facilities for their operations. But instead of building such facilities from scratch, the trend has been to find old, abandoned industrial factories. Many of these structures are ideal for a bitcoin mining farm with many necessities already in place. Deserted aluminum, steel, and denim factories are being suddenly turned into cryptocurrency mining headquarters. While this may seem beneficial to some local economies, many residents oppose these new developments. In essence, they question whether the benefits justify the cryptocurrency mining problems that go along with them.
“…[C]ertain places like the old Alcoa [aluminum] factories are some of the most popular, because they’re very large buildings with a lot of installed electrical infrastructure, and the buildings were designed to remove heat, so they become natural places for [cryptocurrency] mining.” -Mike Colyer, CEO of Foundry
The Perfect Place for a Bitcoin Mining Farm
When it comes to finding the ideal spot for a bitcoin mining farm, there are several features to consider. Structures must be large and open in order to accommodate hundreds of banks of computers and their associated ventilation needs. Likewise, as has been recognized as one of the cryptocurrency mining problems, they must have access to cheap, abundant energy. Typically, this means the ideal location is rural in nature whether energy costs tend to be less expensive. They must also have available water supplies, which can be used to cool mining operations and potentially provide hydroelectric power. Old factories and warehouses meeting these criteria are the ones that are now in high demand. (Dive deeper into the dark side of Bitcoin mining in this Bold story.)
Currently, there are several hotspots for bitcoin mining farm development. One of the most popular areas is in western and northern New York. Plants that were previously used for aluminum, steel, and coal production have sat vacant for years. But they provide all the needs a bitcoin mining farm might need. Other popular regions include rural North Carolina. Some cryptocurrency mining farms now exist in deserted denim factories previously owned by Levi Strauss. Using these types of old facilities offers a great way to tap into existing structures and revitalize some rural areas. But cryptocurrency mining problems exist as well, making this revitalization somewhat bittersweet for some.
“It has been easy for these [cryptocurrency mining] companies to fly under the radar because the whole industry is confusing to understand…It’s too new of an industry not to be regulated federally or statewide in respect to greenhouse gas emission and the effect on water and air.” – Anna R. Kelles, New York State Assembly Person
The Environmental Debate Over Cryptocurrency Mining
A bitcoin mining farm, regardless of its size, is known to require tremendous amounts of energy. Hundreds of computers are required to perform the necessary computations of blockchain. In fact, some existing mining farms use enough electricity to power 85,000 homes. But electricity and energy are not the only concerns when it comes to cryptocurrency mining problems. These same facilities also require an abundance of water, whether it’s in the form of a coolant or a hydroelectric source. It is not uncommon for a bitcoin mining farm to use 100 million gallons of water a day for cooling alone. Given that water scarcity is a real concern for the future, many see this as equally important cryptocurrency mining problems.
To highlight concerns over these cryptocurrency mining problems, specific examples can be provided. Greenidge Generations recently took over an old coal plant in at Seneca Lake in the Finger Lakes region of New York. The plant currently takes millions of gallons out of the lake to cool its mining computers. It them returns the water, at a much warmer temperature, to nearby trout streams. While the company denies any environmental harms are occurring, others disagree. Likewise, they’re concerned that the significant demands for energy that a bitcoin mining farm requires will have long-term negative effects. Even if these mining plants use renewable energy sources, it might limit access to these energy sources for others. In turn, this would drive the use of fossil fuels all over again.
“A lot of industry has left over the years, and here we are trying to bring Digihost in and people are fighting us on that.” – Robert Pecoraro, President of the Common Council in North Tonawanda, N.Y.
An Economic Boom for Some Rural Areas
Without question, many rural communities find the economic benefits of a bitcoin mining farm appealing. Digihost, which took over a natural gas-powered plant near Buffalo, is creating new jobs for the community. Plus, the use of municipal water resources will provide a $1 million windfall for the city. Cryptocurrency mining problems aside, these perks make it difficult to turn down cryptocurrency mines. That doesn’t mean it’s the right thing to do, but these benefits certainly make for a more difficult decision.
In the long-term, cryptocurrency mining problems must be addressed. China, which once led the world in cryptocurrency mining, has since banned the practice. This was done in an effort to meet its carbon reduction goals. The same considerations must now take place in the U.S. as well, where bitcoin mining farm presence is ever-increasing. Whether regulatory oversight occurs at a local, state or federal level is yet to be determined. But it’s clear that the digital gold rush is in full swing, and there’s a boom in U.S. cryptocurrency mining farms. The sooner such oversight occurs, the better.