new yorkbased bitcoin 100m

One obstacle to large-scale Bitcoin mining is finding enough Cheenergy to power the huge, power-hungry computer arrays that create and process cryptocurrencies. A mining company in central New York developed a novel solution that alerted environmentalists. It uses its own power plant.

Greenidge Generation operates a once-decommissioned facility near the shores of Seneca Lake in the Finger Lakes area to produce approximately 44 megawatts to power 15,300 computer servers, plus additional power fed into the state’s power grid. The megawatts made available for Bitcoin could be enough to supply more than 35,000 households with electricity.

Proponents call it a competitive way to mine increasingly popular cryptocurrencies without putting a strain on the existing power grid.

They fear a wave of resurrected fossil fuel power plants pumping greenhouse gases more for private profit than public good. They see Greenidge as a test case and call on the state to refuse the renewal of the air quality permit of the plant and to put the brakes on similar projects.

“The current state of our climate requires measures to mine cryptocurrencies,” said Liz Moran of Earthjustice. “We are jeopardizing the ability of the state to achieve our climate goals and are thus setting the course for the rest of the country.”

The former coal-fired power station in a tourist region known for its glacial lakes and Riesling wines was converted to natural gas by Greenidge and started producing electricity in 2017. The company said it was bringing “a piece of the world’s digital future” to New York state.

“For decades this region has been told it would see new industries and opportunities,” Greenidge said in a prepared statement. “We’re actually making it happen, completely within the country’s leading high environmental standards.”

Bitcoin miners unlock bitcoins by solving complex, unique puzzles. As Bitcoin’s value increases, the puzzles become increasingly difficult and require more computing power to solve. Estimates of how much energy Bitcoin uses vary.

Greenidge said it had mined 729 bitcoins in the three months ended September 30. The value of the cryptocurrency fluctuates and on Friday one bitcoin was worth over USD 59,000.

Opponents are frustrated that Greenidge applied to run a power plant but is now running a mine that uses more electricity from the power plant.

Greenidge says mining was not part of the plan when the facility came back on line, noting that they continue to feed electricity into the grid. From January through June, Greenidge said it used 58% of its energy in mining.

Supporters see it as an economic boon in part of New York state that could use the help. Douglas Paddock, chairman of the Yates County Legislature, testified at a public hearing this week that the plant created 45 high-paying jobs and “made a significant contribution” to the region through tax payments and capital investments.

Some opposition to the facility is focused on the potential impact of its water withdrawals from Lake Seneca. But air quality issues were at the fore while the state Department of the Environment reviews the plant’s air emissions permits.

Greenidge has stated that it is honoring its permits and that the facility is 100% carbon neutral thanks to the purchase of carbon offsets such as forest programs and projects to collect methane from landfills.

Opponents claim the facility is undermining the state’s efforts to drastically reduce greenhouse gas emissions in the coming decades under the 2019 Climate Change Act.

A grand coalition of environmental groups and other organizations this week called on Governor Kathy Hochul to deny Greenidge’s air permit and take similar measures to prevent an existing facility near Buffalo from becoming a mining site. The coalition wants Hochul to set a “national precedent” and enact a nationwide moratorium on the energy-intensive “proof-of-work” cryptocurrency used by Bitcoin miners.

Environmentalists estimate that there are 30 plants in New York that could be converted into mining operations.

“I really think this plant is above all an important test of whether the state’s climate law is really worth anything,” said Judith Enck, who served as the EPA’s regional northeastern US administrator under President Barack Obama.

Sens. Chuck Schumer and Kirsten Gillibrand have separately entrusted the Federal Environment Agency with the supervision.

There are other power plants across the country that are used for mining cryptocurrencies under various agreements.

In Venango County, Pennsylvania, a power plant is used to mine bitcoins, converting waste coal into electricity and feeding electricity into the grid when needed. Stronghold Digital Mining plans to replicate this type of operation in two other Pennsylvania locations.

And in Montana, a coal-fired power plant is now supplying 100% of its energy for Bitcoin mining to Marathon Digital Holdings as part of a power purchase agreement.

“We had previously done what many miners do, namely to find an industrial building, set it up for mining and then get electricity from the grid,” said Marathon boss Fred Thiel. “And we wanted to turn this model on its head because we knew there were a lot of untapped energy sources in the US.”

Thiel said the harmful emissions were low due to the quality of the coal and pollution, and that the facility would be carbon offset by the end of next year. He said his company is focused on the renewable energy transition and said cryptocurrency miners could provide crucial financial incentives for building more clean energy projects.

New York State has yet to make a decision on Greenidge’s permits.

Greenidge said that even when the facility is at full capacity, the potential emissions are equal to 0.23% of the state’s 2030 greenhouse gas reduction target.

However, State Environment Commissioner Basil Seggos tweeted last month that “Greenidge has failed to demonstrate compliance with the NY climate law,” based on the goals in that law.

“New York State is a leader in climate change,” Seggos said in a prepared statement, “and we have some major concerns about the role cryptocurrency mining could play in generating additional greenhouse gas emissions.”

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