An obstacle to large-scale bitcoin mining is finding enough cheap energy to run the huge, power-gobbling computer arrays that create and transact cryptocurrency. One mining operation in central New York came up with a novel solution that has alarmed environmentalists. It uses its own power plant.
Greenidge Generation runs a once-mothballed plant near the shore of Seneca Lake in the Finger Lakes region to produce about 44 megawatts to run 15,300 computer servers, plus additional electricity it sends into the state’s power grid. The megawatts dedicated to Bitcoin might be enough electricity to power more than 35,000 homes.
Proponents call it a competitive way to mine increasingly popular cryptocurrencies, without putting a drain on the existing power grid.
Environmentalists see the plant as a climate threat
“The current state of our climate demands action on cryptocurrency mining,” said Liz Moran of Earthjustice. “We are jeopardizing the state’s abilities to meet our climate goals, and we set the stage for the rest of the country as a result.”
The former coal plant was converted to natural gas by Greenidge and began producing electricity in 2017. Bitcoin mining at the plant, which has a 106-megawatt capacity, started in earnest last year. The company said it was “bringing a piece of the world’s digital future” to upstate New York.
“For decades, this region has been told it would see new industries and opportunities,” Greenidge said in a prepared statement. “We are actually making it happen, and doing it fully within the state’s nation-leading high environmental standards.”
Bitcoin miners unlock bitcoins by solving complex, unique puzzles. As the value of Bitcoin goes up, the puzzles become increasingly more difficult, and it requires more computer power to solve them.
Greenidge said it mined 729 bitcoins over three months ending Sept. 30. The value of cryptocurrency fluctuates, and on Friday, one bitcoin was worth over $59,000.
Around the country, there are other power plants being used for cryptocurrency mining under different types of arrangements.
In Venango County, Pa., a generation plant that converts coal waste into power is being used to mine bitcoins and can provide electricity to the grid when needed.
And in Montana, a coal-fired generating station is now providing 100% of its energy to Marathon Digital Holdings for bitcoin mining under a power purchase agreement.
“We had previously done what many miners do, which is you find an industrial building, set it up for mining and then you contract for power from the grid,” Marathon CEO Fred Thiel said. “And we wanted to flip that model upside down because we knew that there are lots of underutilized energy generation sources in the U.S.”