Bitcoin: Mining with Fossil Power Plants Threatens Environmental Goals

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Bitcoin mining (BTC) requires the use of cheap electrical energy to run sets of computers that perform complex operations to extract the cryptocurrency. An alternative found by miners is the reactivation of electricity plants from fossil sources to be dedicated to the activity.

Greendigde Generation, a factory accused of melting 12,000-year-old glacial lakes in the Finger Lakes region of the United States, is being seen by environmentalists as a test of other fossil fuel plants being used for mining and compromising the goals of reduction of greenhouse gas emissions.

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The plant produces 44 megawatts, electricity that would be enough to power more than 35,000 homes, but much of it is used to power 15,300 servers that mine Bitcoins 24 hours a day, seven days a week.

The original factory used coal as a raw material to generate electricity. With its reopening in 2017, it was converted to natural gas, a less polluting form that still emits greenhouse gases.

Between July and August 2021, Greenidge claims he was able to extract 729 BTCs. The value equates to around US$45 million, or almost $250 million, with BTC’s quotation close to $62,000.

Sustainable mining

Greenidge’s case is not unique. Other plants in the US are using the electricity generated to mine cryptoactives. However, not all use fossil fuels to produce energy.

The Mechanicville plant in New York extracts Bitcoins from electricity generated by the power of water. The operation, managed by Albany Engineering Corp., meets a demand for sustainability in the cryptomarket by using renewable energy to mine digital coins.

Still, there is concern about rising production costs for regular electricity consumption. Albany Engineering Corp. earn 3 times more per kilowatt-hour when mining Bitcoin compared to the price paid for the US power grid. This can discourage the production of electricity for regular consumption and encourage crypto-mining.