Washington bitcoin mining

The cryptocurrency explosion has forced Washington to adapt federal financial rules to a quickly growing and changing industry. Americans have poured billions of dollars into cryptocurrencies and a wide array of blockchain-based financial platforms over the past year as the pandemic triggered an investment boom. While the crypto market has picked up steam steadily over the past decade, a surge of interest in the space and the rapid rise of decentralized financial networks has drawn fresh attention from regulators and lawmakers. Democrats, Republicans and industry advocates largely agree that the current patchwork of state and federal rules covering cryptocurrencies and technologies is no longer feasible. The Securities and Exchange Commission, Commodity Futures Trading Commission CFTC , the Treasury Department and state money transmission licensers all share overlapping jurisdiction over parts of the crypto industry, which often leaves firms unsure about their regulatory obligations. Ron Hammond, director of government relations for the Blockchain Association, said two forces have driven a regulatory awakening in D.

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Content:

• Washington County orders BrightRidge to shut down its Bitcoin mining farm in 30 days
• 5 Best States For Bitcoin Mining (and the Worst)
• Bitcoin Mining Breathes Life into Zombie Coal Plants
• Soaring bitcoin prices put Central Washington electrical utilities on alert
• Cryptocurrency jobs in Washington State
• Lawsuit seeks restraining order to shut down Bitcoin mine in Washington County
• Bitcoin Uses More Electricity Than Many Countries. How Is That Possible?
• The Political Geography and Environmental Impacts of Cryptocurrency Mining

WATCH RELATED VIDEO: Cryptocurrency: Virtual money, real power and the fight for a small town's future

Washington County orders BrightRidge to shut down its Bitcoin mining farm in 30 days

Bitcoin is on the verge of going mainstream, with some companies — and even countries — recognizing the cryptocurrency as legal tender. The market cap of Bitcoin now surpasses both Facebook and Tesla , and it also recently became the 13th largest currency in the world.

In the real world, however, the surging investment in virtual currency is inflicting real world impacts — perhaps nowhere more acutely than Pennsylvania. As Bitcoin mining operations scour the globe for readily available electricity, previously dead or dying fossil fuel plants are being resuscitated and repurposed to power single-purpose supercomputers.

The result is a tremendous amount of unnecessary carbon pollution. Rather than relying on a bank or other centralized institution to mediate financial transactions, Bitcoin and other cryptocurrencies promise to cut out the middleman.

Ensuring the validity of those blocks is a decentralized process. Finding the correct hash essentially amounts to solving enormously complicated math problems, and therefore requires tremendous computer processing power.

In essence, the institutional middleman that provides legitimacy to currency transactions is replaced by complex computer work. The work is decentralized — anyone can do it who has the computers — but those computers require a lot of electricity.

To incentivize Bitcoin users to lend their computing power to this decentralized, intensive verification system, they are rewarded with newly-created Bitcoin for each successful verification. Currently, the reward for successfully validating a block of transactions is 6. Performing the verification service requires a spectacular amount of energy — both to run large numbers of specialized supercomputers and then to keep those large numbers of specialized supercomputers from overheating.

Worse, because the Proof of Work algorithm increases the complexity of the math problem for each subsequent block of transactions, the electricity consumption for each newly minted Bitcoin necessarily increases as well.

Electricity consumption from bitcoin will inevitably grow over time. After all, Bitcoin is not a small, developing nation with diverse needs for electricity spread across millions of people. In other words, the industry is consuming huge amount of energy to make a tiny number of participants extremely wealthy. Given their insatiable thirst for energy, it comes as no surprise that Bitcoin miners are constantly searching for cheap, reliable electricity.

Abundant and affordable hydropower in the Columbia River Basin — itself the result of massive public investment over the past 75 years — attracted a surge in Bitcoin mining operations in the Pacific Northwest, primarily in Chelan, Douglas, and Grant Counties in central Washington State. In response to this risky concentration of energy consumption in one highly transient industry, public utilities in the Mid-Columbia Basin counties instituted thresholds that trigger adjusted rate schedules for cryptocurrency mining operations.

These policies appear to have stabilized cryptocurrency mining operations in the area, effectively putting a cap on the percentage of the electricity supply that cryptocurrency mining may consume. Different dynamics are playing out in different places as bitcoin miners move operations in search of the cheapest electricity they can find in large quantities.

In some cases that mean buying power from cheap-to-operate hydropower dams, while in other places it may mean buying entire coal waste-burning plants to cash in on government subsidies. But in all places, local regulation plays a key role in the siting of Bitcoin mining. While some headed across the border to neighboring Kazakhstan and Russia, most flocked to areas of the United States with more relaxed regulatory environments.

Texas, in particular, has seen an influx in Bitcoin mining activity. More recently, some Bitcoin mining operations are turning towards full vertical integration in order to control costs and ensure access to a steady supply of cheap electricity.

In theory, Bitcoin miners could build or buy solar or wind energy facilities to power their operations. But miners hunting for quick sales at bargain basement prices are often turning to stranded fossil fuel assets.

When that agreement expired in , however, the plant struggled in a competitive power market, in part because of the emergence of abundant cheap natural gas. By , Scrubgrass was likely destined for closure— until it pivoted to Bitcoin. Burning all that coal generates , tons of carbon pollution annually, equivalent to 80, cars.

It can also be dangerous: one Scrubgrass employee fell to his death in while attempting to clean up material that had spilled off a conveyor belt. Scrubgrass is just the start. Stronghold has executed a purchase agreement to acquire a second waste coal plant in Pennsylvania, the Panther Creek Energy Facility, and aspires to buy a third.

Like Scrubgrass, Panther Creek was increasingly unable to compete on the open electricity market— operating at less than one tenth of its capacity prior to its acquisition by Stronghold.

A similar story is playing out in other regions across the country. A formerly mothballed coal plant in the Finger Lakes region of upstate New York was converted to run on natural gas and reopened to power a large-scale Bitcoin mining operation. Big Rivers owns and operates four coal-fired power plants, though two are currently idled. And in West Virginia, the Grant Town power plant recently announced plans to continue burning coal waste, most of which is supplied by a company owned by Senator Joe Manchin.

Even in instances where Bitcoin mining is capitalizing on still-operating energy facilities, the net result is hardly climate positive. Large, existing fossil fuel entities — including giants like Saudi Aramco, Gazprom, and ExxonMobil — are moving into this space too, harnessing what was previously a byproduct to capture more wealth in the form of Bitcoin.

Pennsylvania has become something of a hub for dead and dying coal plants to revive as engines for Bitcoin mining. Rob Altenburg, Senior Director for Energy and Climate at PennFuture, outlines four major subsidies — all borne by Pennsylvania taxpayers — that enable Bitcoin mining to be a uniquely profitable enterprise in the state. The first is capacity overprocurement , in which the regional power distribution utility PJM pays in advance for more electricity than it actually anticipates needing in order to account for outages and other uncertainties.

Traditionally, utilities are extremely conservative in both their forecasts and reserve margins: they expect electricity demand to be far higher than it ends up being, and on top of that, advance auctions commit utilities to far more reserve capacity than they need.

In practice, this works as a giveaway to old, inefficient fossil fuel plants that might otherwise shut down, expanding the margin at which it is profitable to continue operating. Coal is notoriously dirty, but waste coal is even worse. As it happens, Pennsylvania has an unusual amount of coal refuse lying around.

In actuality, the practice just transforms a problem for land and water pollution to a problem for air and climate pollution. The AEPS credits are a major reason why Pennsylvania is home to a lot more coal waste-burning plants than other states. But there are other handouts to and carve-outs for waste coal, showcasing just how desperate legislators and regulators are to turn this highly visible pollution problem into an invisible one.

Pennsylvania already offers a Coal Refuse Reclamation CRR tax credit, rewarding plants for each ton of waste coal burned. At the same time, the state has reserved almost 13 million allowances for waste coal facilities subject to the Regional Greenhouse Gas Initiative RGGI — enough to allow waste coal plants to double their pollution for free. At the state and regional level, untangling the crypto mess would take a concerted effort by policymakers.

Fixing the capacity overprocurement problem would constrain the profit margins for failing fossil fuel plants, and doing so would put money in the pockets of local residents. Almost by accident, PJM recently managed to save ratepayers billions of dollars when legal delays allowed for better demand forecasts. And when it comes to managing the problem of waste coal piles, the public would be better served by pursuing proper disposal and remediation efforts.

New federal spending on mine reclamation included in the recent infrastructure bill may help remediate some of these sites. At the same time, regulators could more stringently apply air pollution controls to operating plants, and it would be better to simply stop burning coal waste altogether.

To address the Bitcoin dynamic in particular, Pennsylvania legislators could join their counterparts in New York in considering a prohibition on the use of fossil fuels to mine for Bitcoin.

Though as the example of the Columbia River Basin shows, even mining Bitcoin with renewable energy can be problematic. Where mining operations are not vertically integrated with power plants, revised rate schedules could help limit the risk of overallocating electricity at the expense of other ratepayers though this may not be a major risk in the PJM market where power generating costs tend to be relatively high.

More broadly, policymakers could look to strategies to push cryptocurrencies away from Proof of Work entirely, such as novel concepts like Proof of Stake. Some cryptocurrencies, such as Ethereum , are working to shift towards less energy intensive mechanisms to verify transactions and maintain their blockchains, though making that shift proving more difficult than anticipated.

In a way, the crypto mining problem in Pennsylvania is a modern twist on an age-old story: get-rich-quick schemes always have a catch. What remains to be seen is whether policymakers will intervene or whether Pennsylvania residents will be the ones left holding the bag. Cryptocurrency gold rush looks to be costly and hazardous for Pennsylvania residents.

Electricity consumption acts as a sort of gold standard for cryptocurrency Rather than relying on a bank or other centralized institution to mediate financial transactions, Bitcoin and other cryptocurrencies promise to cut out the middleman. Bitcoin raises the dead Given their insatiable thirst for energy, it comes as no surprise that Bitcoin miners are constantly searching for cheap, reliable electricity.

Profits for miners, pollution for Pennsylvania Pennsylvania has become something of a hub for dead and dying coal plants to revive as engines for Bitcoin mining.

Eric de Place.

5 Best States For Bitcoin Mining (and the Worst)

Every product is independently selected by editors. Things you buy through our links may earn New York a commission. Starting in the s, Levi Strauss built many plants like this across the American South — and then shuttered almost all of them in the s and early s, when it moved its manufacturing operations overseas. After this North Carolina factory closed in , the building, which sits on 70 acres of land, stood empty for almost two decades. Then the crypto miners came to town.

Bitcoin Mining Breathes Life into Zombie Coal Plants

With the addition of the 24MW data center, the company now has a total mining capacity of MW, but it is estimated that the completed facilities will produce 3. Related: Bitfarms stocks tumble on Nasdaq debut amid the downturn in the crypto market. At a time when many are citing the potential environmental impact of cryptocurrency mining, Bitfarms claims that its facilities in Canada are powered almost entirely by hydropower. Cointelegraph previously reported that Bitfarms doubled monthly crypto mining productivity between January and July and raised BTC and BTC, respectively, likely as a result of the crash. According to the mining company, they currently have 10 active or growing farms in countries like the United States, Argentina, and Canada. At the time of writing, Bitfarms claims a mining capacity of 82 MW at 1. Email us: [email protected]. Remember Me. About Coincu Hot topics Random.

Soaring bitcoin prices put Central Washington electrical utilities on alert

With this acquisition, we enter the United States and continue our global expansion to 10 farms in operation or under development in four countries. The initial 24MW acquisition will increase our total mining capacity to MW and boost our total hashrate as additional miners are installed. This low-cost power combined with the industry leading efficiency of the Bitmain S19j Pro means 6, miners in Washington could yield nearly 3. We are very excited to continue to complete strategic transactions that deliver significant value to our shareholders. Jump to page content Accessibility.

Cryptocurrency jobs in Washington State

A technician works at the Bitfarms bitcoin mine in Magog, Que. As the price of bitcoin soared over the past 14 months, Hut 8 was suddenly swimming in far more revenue than it ever had, opening up new doors for one of the oldest and largest digital asset miners to innovate, Ms. Leverton told The Globe and Mail in a recent interview. Many have seen their stock prices skyrocket, revenue and profits soar, prompting a healthy inflow of capital that is subsequently deployed into various new ventures in the cryptosphere. In a way, the maturation of crypto miners makes sense — it corresponds to the explosive, unbridled growth of anything associated with blockchain technology, a mania that some have previously termed speculative, geared just for the rich , and even worthless.

Lawsuit seeks restraining order to shut down Bitcoin mine in Washington County

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Bitcoin Uses More Electricity Than Many Countries. How Is That Possible?

Many companies featured on Money advertise with us. Opinions are our own, but compensation and in-depth research determine where and how companies may appear. Learn more about how we make money. Want to sit in your pajamas, drink your coffee and mine some bitcoin from your bedroom?

The Political Geography and Environmental Impacts of Cryptocurrency Mining

RELATED VIDEO: Bitcoin mining company expands in Washington County, Georgia

Utility crews east of the Cascades are once again on high alert for suspiciously high power bills, hour exhaust fans, and other telltale signs of bootleg bitcoin mines. With the price of the virtual currency more than doubling since Dec. One reason things are quiet: Since the first bitcoin boom, basin PUDs have upped power rates for miners, who earn bitcoin by solving the complicated equations that govern bitcoin transactions. And in the meantime, PUDs are watching for a return of the small-scale mines that cropped up last time in basements, sheds and other hideaways — and which periodically overloaded residential power lines. Residential customers in the basin pay as little as 2. Grant County PUD alone got requests or inquiries for 2, megawatts of power, or roughly three times its entire hydroelectric output.

We wanted to know if either checked out, so we made some calls. Six China-based miners and industry insiders contacted by TechNode said they have no intention of moving their operations to North America, but industry watchers said there are signs that the industry is preparing for take off in North America. It plans to build its own mining operations and finance other companies to do the same across the US and Canada. Just yesterday, a Congress committee debated a bill to support US competitiveness in blockchain technology that could include crypto mining. China, or US vs.

The company is known for exploring mining sites all over the world and is always looking for new ways to expand and grow. Bitfarms has also entered into a Memorandum of Understanding MOU with the seller to co-develop additional farms in the area, increasing total mining capacity up to 99 MW in Washington. At first, this move came as a surprise.