Massena will soon be home to one of the biggest Bitcoin mining facilities in the world. Coinmint, a cryptocurrency mining company, has invested $700 million to convert a former Alcoa aluminum smelting plant into a facility that could mine an estimated 20 percent of the world’s Bitcoin. The development has drawn worldwide attention to the North Country and the obscure practice of mining cryptocurrency.
“Mining is not ‘looking for Bitcoins’ like most people think,” said SLU Economics Professor Michael O’Hara. “What these mining operations are really doing is verifying the transactions and making sure that they are real, and then they link that to the next transaction with a code. It takes up so much computing power because to make the code to link the next transaction, you have to run very fast guesses,” explained O’Hara.
The global competition to verify each Bitcoin transaction, along with the high computing power needed, results in the high amount of energy used by Bitcoin mining companies. “All Bitcoin miners are in a race to verify the next transaction, and the miner that wins that race gets Bitcoins in return,” said SLU Computer Science Professor Ed Harcourt. “That’s why people want the fastest computers, and that takes a lot of electricity.”
Due to the abundance of hydroelectricity and wind energy in the North Country, Coinmint is able to pay less for energy usage compared to other parts of the world. “New York State actually has a plethora of power that is not being used so they are trying to get companies to use that power and give incentives to move to places like Massena,” said Harcourt.
Despite the low employment required to maintain cryptocurrency mining facilities, citizens of Massena have still lauded the expected employment of 150 people by Coinmint. “Any legitimate jobs are good jobs,” said Town Board Member Sam Carbone. “It is not the 500 to 700 jobs that used to be there but there are jobs.”
The Coinmint facility also adds tax revenue to the Massena government. “The buildings will still be there and the taxable value is still there so Massena and the county will reap the rewards of collecting property tax on the facility,” said Carbone. “So that keeps those buildings up and operating, and actually adds some value because there is some money-making opportunity there.”
Although the Coinmint facility may offer a boost to the Massena economy, it is only a short-term solution for a poor local economy. “Mining takes up a tremendous amount of power,” said O’Hara. “I can’t imagine that’s the future way money is going to work, especially with concerns about climate change and energy use.”
Coinmint is currently employing 60 workers at the 1,300-acre site. The company expects to have the facility working at full capacity by the end of 2019, according to a press release.