The Real Deal New York

Why the phone is ringing off the hook for real estate in a small, upstate NY town

Bitcoin miners want to take advantage of cheap electricity
September 22, 2018 09:52PM

(Credit: Marko Ahtisaari, Pixabay)

A hydroelectric dam in upstate New York is like a moth to a flame for crypto miners looking for property.

Its surrounding areas’ cheap electricity is driving interest in property from miners near and far, according to the New York Times.

“Back last fall when Bitcoin was at $15,000 to $20,000, we were getting eight to 10 calls a week and they were wanting to set up within two or three weeks,” Andrew McMahon of the Massena Electric Department told the Times. (Massena, New York is one of the towns blessed, or perhaps cursed, with the low-cost electricity.)

At least one mining operation has successfully secured space in the area: a company called Coinmint, but it’s hit a snag in terms of neighborly relations.

Last winter, electricity bills shot up 30 percent in January and February as a result of the company’s mining operations in the town of Plattsburgh, where the company first set up.

“With two guys, they can consume more electricity than a hospital,” said Thomas Recny, the CFO of one of the largest companies in Plattsburgh, to the Times. Recny’s company had a $60,000 hike to their bill as a result of the increased burden the mine put on the town’s grid.

As a result, the city instituted a moratorium on any new crypto mining operations moving in. The moratorium prompted Coinmint to look at the old aluminum factory in a different town, Massena, New York. After Plattsburgh’s experience with Coinmint, the municipality is considering how to stymie the onslaught of crypto mines. But, fortunately for Coinmint, they signed a 10-year lease for the smelting works in June.

The company plans to pour $700 million into converting a former 1,300-acre smelting works into the world’s largest cryptocurrency mining operation and claims they will eventually hire locals to work there. [NYT] —Erin Hudson