If, in 2017, you had taken a gamble and purchased a comparatively new digital currency called Bitcoin, today you would be a millionaire many times over. But while the industry has provided windfalls for some, local communities have paid a price.
Cryptocurrency is created by computers solving complicated mathematical equations—a process that took off after a Chinese company called Bitmain started selling a machine in 2016 with application-specific integrated circuits that made it possible to do this specialized computing much more quickly. “Almost overnight,” says Colin Read, a professor of economics and finance at the State University of New York at Plattsburgh, “a crypto-mining arms race began.”
People began scouring the world for cheap sources of energy to run large Bitcoin-mining farms using these circuits. Cryptocurrency notoriously devours electricity; each Bitcoin transaction consumes 1,173 kilowatt-hours—more than the average American uses in a month. In 2020, the world’s crypto mining required more energy than the whole of Switzerland. At the time, Plattsburgh had some of the least expensive power anywhere in the United States, thanks to cheap hydroelectricity from the Niagara Power Authority.
It didn’t take long for a subsidiary of the popular mining firm Coinmint to lease a Family Dollar store in Plattsburgh. The city’s building inspector, Joe McMahon, remembers that the man who signed the lease, Prieur Leary, wanted everything done quickly. “Overnight, he wanted power on,” McMahon says. “We were all uneasy about it but didn’t know the harm.”