Crypto Miners Are Buying Entire Power Plants to Feed Their Energy Needs

But the nascent industry is facing mixed reception.
Brad Bergan
An abandoned power plant.zmeel / iStock

Power plants and factories from a host of 20th-century industries are finding ways to enter a new sector of the economy.

Cryptocurrencies have hit unconscionable highs in prices and exchange, giving birth to several new currencies and spurring speculation on blockchain-backed NFTs. And the high crypto prices have served to fuel substantial growth in mining operations, making former industrial spaces a tempting addition to the real estate market, with the potential to be converted into Bitcoin mining facilities, according to an initial report from Curbed.

"We've produced enough machines now" to match the surging demand for crypto-mining facilities, said Foundry CEO Mike Colyer in the report. Foundry provides advisory consultation and equipment financing for other crypto miners who have plenty of devices to do what they love, but "don't have anywhere to plug them in," he added.

Defunct industrial plants are ideal for crypto mining

Numerous defunct factories are owned by private real-estate developers who typically purchased a host of them when manufacturing dropped out of the picture throughout the country. "We're getting phone calls from people even in New Hampshire and Vermont, from someone who might own a paper mill that went out of business, who'll say, 'I've got a paper mill and nobody else wants to come up here, so I put in a bitcoin-mining facility?'" said Coyler in the report.

Among crypto miners, demand is high for cheap land, industrial infrastructure (that isn't hard to repurpose), and factories that've fallen out of use. Spaces previously dedicated to manufacturing are especially high on the list of demands, since the industrial process is a not-too-distant cousin of what crypto mining entails. "You need to get a lot of air into the building and a lot of air out of the building, so typically you'd open up the side walls and vent it through the roof," said Coyler, in the Curbed report. "That's why certain places like the old Alcoa 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 mining."

The crypto mining industry generates CO2 emissions

However, not everyone is thrilled about the snapping up of ex-manufacturing plants across the nation, since concerns about power costs and energy consumption have fueled an uptick in anxiety about how this industry can fit into a sustainable-oriented future. In 2019, scientists from the Technical University of Munich found that the use of Bitcoin generates roughly 22 megatons of CO2 emissions annually — a volume comparable to an entire city like Las Vegas, or Hamburg, in Germany. And with the recent introduction and craze surrounding NFTs in the wake of the COVID-19 coronavirus, these figures have risen dramatically.

While there's no denying the potential profit in crypto mining for owners of manufacturing and other industrial facilities that've fallen out of use in the last several decades, some elected officials and residents in New York, for example, are already worried about the effects crypto mining might have on the surrounding environment. Early in June, roughly 200 people gathered at the regional headquarters of the New York State Department of Environmental Conservation to rally against a hydropower facility that had pivoted to crypto mining. Called Greenidge Generation, it set up shop last year in a defunct coal power plant, and later some residents suggested that the nearby Seneca Lake was heated by crypto mining activity (however, Greenidge vehemently denied claims of negative environmental impact). It's too early to say what will or can happen as crypto mining projects spread throughout the now-defunct manufacturing infrastructure of decades past. But one thing is certain: The new crypto-mining industry is booming.

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