Bitcoin mining is an energy-intensive process. Miners are currently buying old power stations in the state of New York to supply their operations. We discuss this in the article below.
It is estimated that there are currently 137 Bitcoin mines in the US, spread across 21 states. The country mines around 40% of the world’s supply and the US Energy Administration has suggested it uses up around 2.3% of the country’s power. Four of the largest mines in the country are situated in New York state. These pieces of infrastructure consume vast amounts of power as they perform advanced mathematical computations, hashing out digital cryptocurrencies, namely Bitcoin. Old New York power plants are now being bought up to supply the needs of these mines.
The Conundrum of Bitcoin Mines
Bitcoin is managed by a decentralized network of users. An algorithm assigns each transaction a random code. It is the job of these mines to crack this cryptography. On average, these codes are cracked around every ten minutes. When this happens, whoever manages to crack the code receives 3.125 Bitcoin.
This desire to mine has recently increased with the soaring price of Bitcoin. It hit a record price high in January, then stagnated for a period. In the last week, it has shot up again surpassing $111,000. This signifies a record for the currency. At the time of writing, profit-taking has reduced this a little, and anyone looking at the Bitcoin price updates will have seen it hovering around the $109,808 point.
As energy usage for this process is high, mining locations are primarily dictated by where energy can be bought cheaply. New York, especially in the north, has a lot of hydropower making renewable energy low-cost. Using this cheap sustainable energy is a tactic that entire nations have begun to use. Bhutan, the tiny Himalayan kingdom, has used it to build its own reserves of cryptocurrency.
Crucially, New York has numerous decommissioned power plants. It is these that are being bought up by Bitcoin miners and used to power their operations. One company that has bought plants is Greenidge Generation. It is based in Dresden, where they have turned a coal-fired station into a gas-powered one. Here, they can mine around 40 to 120 Bitcoin a month.
The Battle Against Bitcoin Mining
People living in these areas are fighting against them. This is because the servers require huge amounts of water to keep them cooled, straining local supplies. There is also evidence that some reportedly emit noxious gases. However, the most annoying factor is the constant hum they emit, which is described as being like a jet engine. This can be heard up to two miles away.
Even whole states have begun to fight back. In Niagara Falls, a moratorium was put on Bitcoin mining. This was placed in 2021 and later followed by noise level caps of between 40 and 50 decibels.
While it has boomed in the US, in China it is part of a wider crackdown. This may account for some of its popularity in the United States. The country made mining illegal in 2021, and many of those who had been mining there moved to the United States. Bitcoin does not have an infinite supply. At some point, it will run out, and the US government has stated that it wants all of the remaining Bitcoin to be mined in the US.
Further Pressures on Bitcoin Miners
New York is not the only state where cryptocurrency mines are popping up. Texas has long been a pro-cryptocurrency state, and its mines have been increasing. Most mines in the US are already situated in the state. One in Gransbury, which has been engaged in a battle with locals over noise pollution, is owned by Mara Holdings. They have also looked at alternative methods to power their cryptocurrency mines, such as wind farms and taking natural gas from oil fields.
It is not only residents that Bitcoin mines have to compete with. As energy has become more expensive, many Bitcoin miners have begun to change their operations or sell them off to AI data centres. The Electric Power Research Institute has suggested that AI data centres could account for around 9% of total electricity generated in the United States by 2030. Currently, it accounts for 1%-1.3% of global energy consumption as opposed to the 0.4% of crypto mining uses.
If energy prices increase, it could have a hugely detrimental impact on crypto-mining operations. This could result in further independent ventures, which are sure to attract the attention of residents. Some miners have gone global: Taking off to places in the African bush where power is cheap and there is enough space so that they don’t annoy residents. Yet if this continues in the US, it may result in new legislations at the state and federal levels that need to protect the miners and the people living close by.
