Upstate New York becomes hotbed for cryptocurrency mining. It might not last.
The coal-plant-turned-gas-plant-turned-crypto-mine has become emblematic of a battle over the future of digital currencies, particularly Bitcoin, in New York. While more cryptocurrency mining in the U.S. is likely located in Texas and Georgia, limited public industry data indicates New York is a leading state in the Northeast for Bitcoin mining.
Supporters of the industry say the plants help rebuild the struggling upstate New York economy. But as more cryptocurrency mining operations pop up in the state, taking advantage of old industrial space and cheap energy access, environmentalists and some state government officials have grown concerned about the impact. They worry about their aggressive goals for reducing carbon emissions — the state wants to reach net-zero by 2050 — and the quality-of-life effects in some communities.
Now they might take action.
Gov. Kathy Hochul has deferred a decision on a renewed permit for the Greenidge plant, and the state Legislature is mulling a ban on future fossil plants restarting or ramping up operations to run cryptocurrency mines. Lawmakers, who would be the first in the nation to pass such a moratorium, could vote to do so before their session ends in early June.
The Greenidge Cryptomining Plant
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Malik Rainey for Politico Magazine
The measure is “a very narrow bill, specifically saying we cannot turn back on our fossil-fuel based power plants if we are going to reach our [climate law] goals,” said Assemblymember Anna Kelles (D-Ithaca), who has championed the proposed moratorium. “This is explicitly saying, not our power plants that use fossil fuels and not now. … Our responsibility is to hit our climate goals. They’re not goals. They are law.”
The reason upstate New York is a popular destination for these mines is simple: There are large amounts of hydroelectric and nuclear power, relatively low electricity prices and vacant, cheap, empty properties with untapped electrical infrastructure.
The state is dotted with old chemical plants, auto manufacturers, aluminum and steel mills that once employed thousands and now sit vacant. Those empty behemoths have become an attractive destination for a new industry that promises new jobs — albeit not on the same scale — and tax revenue for struggling local governments.
Such operations underpin Bitcoin and similar digital currencies. Miners are engaged in a global competition to solve complex calculations that validate transactions, all in exchange for a fee. The approach is called “proof of work,” and the more computing power a mining operation has, the more fees it can earn. And that means a thirst for electricity.
The majority of the mining projects in upstate New York— at least 11 — are relying not on on-site gas turbines but the electric grid, with a relatively clean mix upstate. Even that raises concerns for environmental groups and some lawmakers, who point out New York’s ambitious mandate to slash emissions will dramatically increase electric needs for heating and transportation.
But that isn’t stopping the industry, even amid its recent struggles on Wall Street.
One of the last coal plants to close in New York is being turned into a Bitcoin mining facility set to pull 110 megawatts, enough to power about 80,000 homes, from the grid to power miners by the end of the year. A defunct coal burning plant in Niagara Falls was cleaned up and fans and miners installed, with additional plans to expand put on hold by a local moratorium.
A former Alcoa aluminum smelter on Canada’s border became one of the first large-scale cryptocurrency mines in the state. Located next to the St. Lawrence Power Project, the facility uses 145 MWs of power and employs 100 people. At its height, Alcoa employed more than 8,000 people in the town of Massena.
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