Bitcoin miners are reactivating fossil plants in the US – Finance – Tecnoblog

While China banned bitcoin (BTC) miners from the country due to the activity’s high electricity consumption, many saw a great opportunity for the main cryptoactive network to become more sustainable and abandon polluting energy matrices. However, it seems that miners are being responsible for reactivating fossil power plants in the United States while re-establishing themselves in the country.

Coal plant in Cheshire, Ohio, USA (Image: peggydavis66/ Flickr)

As the NBC News, there is a trend within the American cryptocurrency industry coming worrying environmentalists. Bitcoin mining is reviving old and nearly defunct fossil fuel-based power plants in the United States. This growing adhesion of miners to polluting sources of electricity discourages investment in renewable and clean matrices and it reinforces an industry that was on the way to disappearance, according to experts.

Reactive coal plant mining company

Four years ago, the Scrubgrass coal plant in the city of Venango, Pennsylvania, was on the verge of financial collapse as it lost nearly all of its customers to cheap natural gas and other renewable sources. But a holding company called Stronghold Digital Mining bought the facility, which burns enough coal residues to feed about 1,800 bitcoin mining machines.

According to a document sent to the US Securities and Exchange Commission (SEC) obtained by NBC, these mining devices are installed in containers around the plant. Stronghold estimated that, with the current structure, it should burn about 600,000 tons of coal waste per year on Scrubgrass.

Bitcoin Mining (Marco Verch/Flickr)
Bitcoin Mining (Marco Verch/Flickr)

However, the holding also revealed that it intends to expand its operations to maintain 57,000 mining machines by the end of 2022. This expansion plan requires the purchase of two more coal plants in the region.

Bitcoin Miners Seek Cheap Energy

According to Alex de Vries, Dutch economist, researcher and founder of Digiconomist, a website that monitors the environmental impact of cryptocurrencies, Bitcoin mining inevitably wastes resources. “It’s a system where participants are forced to waste resources to provide some level of network security. The more value bitcoin has, the more money it generates and the more resources are spent,” he told NBC.

Stronghold has even described its operations as “environmentally beneficial”, pointing to Pennsylvania’s classification of power generation from waste coal as a “Tier II alternative energy source”. This classification allows the holding company to benefit from state subsidies.

“These miners don’t just need cheap energy, but a stable source of energy because their machines need to run 24/7, and fossil fuel sources are best suited for that… Miners are already reviving fossil plants and inactive coal mines in places like New York and Montana.”

Alex de Vries in an interview with NBC

Bans in China Catalyst for Trouble

China has been tightening bans on bitcoin and other cryptocurrencies (Image: QuoteInspector/ Flickr)
China has been tightening bans on bitcoin and other cryptocurrencies (Image: QuoteInspector/ Flickr)

This trend against the sustainability of the bitcoin network seems to have been leveraged by the growing prohibitionist wave of cryptocurrencies in China. Beijing has been imposing one restriction after another on the country’s digital asset market, also targeting miners who consume polluting cheap energy in China’s industrial provinces.

As a result, between June and July this year, around half of the world’s miners went offline while migrating from China to other countries, mainly the United States.

Evidently, the arrival of large companies that bring with them tens of thousands of mining machines was the catalyst for the reactivation of American fossil power plants, which previously operated only when necessary in times of high consumption. Several states, including Texas and Kentucky, are welcoming these miners with open arms, with rights to tax incentives and energy subsidies.

The case of Stronghold and the Scrubgrass mill is just one example of a much bigger picture. In early July, the Finger Lakes region of upstate New York made headlines around the world when the reactivation of a coal plant to mine bitcoin caused the heating of one of the glacial lakes.

With information: NBC News

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