Cryptocurrency mines require a lot of energy. A lot of energy. The global bitcoin network uses more electricity than the country of Greece, according to Digiconomist.com.
Bitcoin is poorly understood, but one thing a skeptical public has wrapped its collective head around is the sense that, in a warming world, mining fossil fuels to fuel the mining of speculative digital money might not be such a good idea.
The criticism has stuck because most early bitcoin mining was conducted in China, and powered by coal mines. In the last year, as cryptocurrency exchange rates spiked and the Chinese government cracked down, large bitcoin mines have sprung up across the Pacific Northwest. The region’s primary appeal has been cheap power. Unlike in China, that power has been the renewable, hydroelectric variety.
That’s been the widely publicized narrative in Washington state and Oregon. As the Indy first noted, the first industrial-scale bitcoin mine to open in Montana — Project Spokane/Hyperblock Technologies in Bonner — utilizies hydropower from Seli’š Ksanka Qlispe’ dam in the Flathead.
But that narrative may need revision. In late March, Public Service Commissioner Travis Kavulla broke some news on Twitter. A new bitcoin mining operation that’s ramping up its servers in Butte and Anaconda, CryptoWatt Mining, has a 64 MW energy contract with Talen Energy. The power will be supplied by Colstrip. “Will bitcoin throw coal a lifeline?” Kavulla tweeted, only somewhat tongue-in-cheek.
CryptoWatt spokesperson Matt Vincent confirms that CryptoWatt’s energy supplier is Colstrip. The company’s first three megawatts came online mid-March, with plans to complete the 64 MW build-out this year.
“Being a for-profit entity, we’re certainly looking for the best deal we can get. It’s a competitive rate,” he says.
CryptoWatt’s contract is more than three times the size of Project Spokane’s, while a Utah-based company recently said it’s investing $250 million at another mine in Butte. Project Spokane has also said it plans to quadruple in size.
If Colstrip offers the cheapest energy around, you can bet that more Montana mines will follow CryptoWatt to Colstrip. And a new mining industry, eager to prove that it’s here for the long haul, could find itself running on the fumes of a dying one.