Going nuclear: how the future of cryptocurrency mining is playing out in rural America

A simple old paper mill in the foothills of Eastern Appalachians It's bustling with a new kind of activity these days: Dozens of containers full of computers now populate the facility, all of them mining cryptocurrency.

Standard Power, a utility company, opened the site located in Coshocton, Ohio, last year. The city is better known for being a prime deer hunting destination than for its advanced data processing facilities, but that may be about to change.

Cryptocurrency miners have long been criticized for their environmental impact, as mining's "proof-of-work" computational operations require large amounts of energy.

A single Bitcoin transaction requires as much energy as a typical US home uses in 73 days, according to The New York Times. The largest cryptocurrency mine in the US, located in texasconsumes as much electricity as three million homes.

But nuclear energy could be the solution to this problem.

This month, Standard Power announced a deal with NuScale, a nuclear energy company, to run two data centers in Ohio and neighboring Pennsylvania with “two small modular reactors” that would produce 2 gigawatts of clean energy.

“I believe nuclear energy is the next frontier of power in communities at large. “It's one of the cleanest, greenest sources of energy we have,” says Andrew Burchwell of the Ohio block chain Council.

"Nuclear energy will be one of the safest energy sources we have and we should rely on it."

In a groundbreaking move earlier this year, the United States' first nuclear-powered Bitcoin mining facility opened in Pennsylvania.

Cumulus Data launched a zero-carbon data center in the northeastern part of the state that, when fully operational, is expected to produce 475 megawatts of power for bitcoin TeraWulf miner.

“The Nautilus nuclear-powered mining facility benefits from what is arguably the lowest-cost energy in the sector,” TeraWulf CEO Paul Prager said in March.

Cryptocurrency mining is becoming more prevalent in parts of rural America.

From Hardin, Montana (population 3,685) to Rockdale, Texas (population 5,398) and many cities in between, cryptocurrency mining companies have been attracted to small American towns by a potent combination of cheap electricity, regulations of lax zoning and China's 2021 crackdown on cryptocurrency miners. .

Cryptocurrency miners have pledged to reach net-zero emissions by 2030, and some mining companies have so far mitigated their carbon footprint by purchasing carbon offsets through forestry projects or methane capture efforts.

Many cryptocurrencies such as SolarCoin and Powerledger have gone down the path of sustainability in a bid to attract environmentally conscious customers and investors.

Currently, the Coshocton mine is powered by natural shale gas. The huge reserves of gas released through fracking in recent years mean that electricity is cheap in Appalachian Ohio.

What's more, some consider Ohio to be a good place for Bitcoin mining, in part because of its climate.

"Computers don't like high temperatures, so Ohio is a pretty nice place to house them," says Mr. Burchwell.

Still, others, such as stock analysts, have tried to pour cold water on the deal between Standard Power and NuScale Power, suggesting that financing and other barriers could be an issue for both sides.

NuScale Power responded by stating that such claims are "riddled with speculative statements with no real basis."

What is Bitcoin and how did it start? - video

What is Bitcoin and how did it start?

"The cost of nuclear energy is generally relatively high, which is not the best option for an industry that has to keep electricity costs as low as possible simply to ensure survival," says Alex de Vries, a researcher at the Vrije Universiteit Amsterdam in the Netherlands.

Even setting aside the potential for nuclear power to make cryptocurrency mining a clean process, De Vries believes that the broader benefits of cryptocurrency mining for small American communities are questionable.

"There are very few benefits to having these miners in your backyard," he says. "Like generic data centers, they generate a negligible number of jobs per electricity consumed and also do not help attract businesses."

That hasn't stopped a growing number of rural American communities from following the mining path.

In some parts of the United States, mining facilities have added tens of millions of dollars to local tax coffers, some of which has been passed on to residents through tax cuts.

In total, about 20 public mining companies are believed to be in operation, many of them in small rural areas of the country, producing 4.25 gigawatts of mining and hosting capacity.

For Sam Bell, who lives right across the street from the Coshocton cryptocurrency mine, the noticeable hum of the fans used to cool the computers is not a major problem.

“Before it opened, there was another factory there, so the noise I hear today is probably the same as before,” he says.

"It is what it is."

Bell says he doesn't know much about the facility, but he hasn't seen his electric bill increase since it opened, as has happened elsewhere.

Proponents of America's new cryptocurrency push say the technology can serve as a gateway to more modern development in what many consider forgotten parts of the United States.

About 8 miles south of Coshocton, a massive coal-fired power plant in Conesville that closed in 2020 will reopen as an industrial park that would include a large Standard Power facility, according to local media.

“There is a lot of outdated infrastructure and rural areas that are looking for ways to stimulate economic activity. “We think Bitcoin mining is an easy way to get into these communities and build infrastructure,” says Burchwell.

“Bringing an economy to the same place generates the same types of tax revenue. In this way, a local economic benefit is produced.”

Updated: November 3, 2023, 6:00 pm