A New York power plant that mines bitcoin faces big test in governor's office

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Mining machines
Cryptocurrency mining machines. FEDERICO PARRA / Getty Images
  • Greenidge Generation has drawn the ire of several environmental organizations for its massive energy consumption.

  • The groups called on NY Gov. Kathy Hochul to block its permit to operate.

Greenidge Generation's power plant in New York that's mining bitcoin has drawn the ire of several environmental businesses and organizations, all of whom recently urged Governor Kathy Hochul to block its permit to operate.

"New York must halt this move to turn old fossil-fuel-powered plants into crypto mining centers until a full environmental assessment is conducted on the impact that these operations will have on greenhouse gas emissions, as well as the state's air and water quality," according to a letter dated October 13 addressed to the governor with more than a hundred signatories.

The letter cited how a crypto mining expansion in the state could "drastically undermine New York's climate goals established under the Climate Leadership and Community Protection Act." The Associated Press was first to report.

New York State Commissioner Basil Seggos also took to Twitter to call out Greenidge saying it "not shown compliance with New York's climate law."

Bitcoin mining - the process whereby computers solve complex puzzles to verify transactions and are rewarded with new coins - has long been criticized for its intensive energy consumption.

The signatories raised issues with resurrecting defunct fossil fuel power plants, highlighting how this will jeopardize the state's progress in reducing greenhouse gas emissions.

As such, they are demanding the governor deny the renewal of the plant's air quality permit. Included in the letter is also a request to deny the permit of the Fortistar North Tonawanda Facility, a natural gas-burning power plant.

Greenidge maintained it is compliant with all laws. New York has yet to make a determination on its permits.

How Greenidge started bitcoin mining

Greenidge Generation began in 1937 as a coal-fired power plant, according to its website. A corporation purchased the plant in 1999 and continued to operate it until 2011.

Then in 2014, a group of private investment funds acquired Greenidge and converted it to cleaner-burning natural gas, allowing it to provide electricity to power up to 20,000 homes and businesses in 2020 alone, the website added.

In 2020, it started commercially mining bitcoin. Today, the company claims to be the "first and only carbon neutral, vertically integrated power generator and bitcoin miner of scale" in the US.

Greenidge in the third quarter of 2020 said in a statement it mined 729 bitcoins and had approximately 15,300 miners in operation.

While there are many opponents of the facility, it does have some advocates. This includes Chairman of the Yates County Legislature Douglas Paddock who, in a public hearing testimony last week, said the plant has brought 45 high-paying jobs to the area and has made a "significant contribution" through tax payments and capital investments, the AP reported.

Around the US, crypto mining plants have and will continue to rise, especially following China's wide-ranging digital asset ban. The US, in fact, has already unseated the Asian nation as the world's biggest bitcoin miner, according to data from the Cambridge Center for Alternative Finance as miners migrate out of China.

Read the original article on Business Insider