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How does Bitcoin mining keep the lights on? Some companies may have solutions

Imagine it’s June 30, 2021, the hottest day of the year in Baltimore at 99°F.

Imagine every house with 65° alternating current. Suddenly everything goes dark and the cool air cuts off all demand on the power grid. A second later, the electricity comes back on because somewhere a large consumer of electricity (like a factory, industrial facility or bitcoin mine) has cut off the power.

Also in 2021China, which has more crypto mining activity than any country, decided to ban Bitcoin mining because he considered the industry very polluting. This opened the door for the United States to become the premier location for Bitcoin mining in the world. States like New York, Texas, and Pennsylvania, as well as small towns like Coshocton, Ohio, have finally become places where industrial-scale Bitcoin mines want to locate.

Mining Bitcoin essentially involves computers performing intensive calculations to validate transactions, as the decentralized nature of cryptocurrencies requires a verification process to prevent bad actors from manipulating the currency. The process is called “proof of work”. The first person to solve the mathematical equation and add their validated transactions to the general ledger – i.e. the blockchain – receives a cryptocurrency as a reward.

“They consume a lot of energy. This is both a problem and a solution, as they can also switch off very quickly if necessary”

David Chernis

According to the estimates of University of Cambridge who were reported by Business Intern. These energy needs in the United States, where 35.4% bitcoin mining takes place, result in 0.85 pounds of carbon dioxide per kilowatt hour (kWh) and 40 billion pounds of carbon dioxide.

This energy consumption is not wasted on utility companies like the one in Baltimore CPower Energy Managementa company that acts as a liaison between Bitcoin miners and power companies.

“They consume a lot of energy” David Chernisa CPower account manager, said Technically. “It’s both a problem and a solution, as they can also switch off very quickly if needed.”

CPower offers network reliability and demand response services. On days with more than 90 degrees or in intense cold weather, the electrical network is stressed; high-energy consumers need to reduce their power consumption so that the community as a whole continues to be smoothly powered.

“If they were to shut down a traditional data center, imagine they shut down Google. What’s going to happen? You are going to see web pages crashing,” the CEO said. Daniel Lawrence from the Baltimore-based cryptocurrency software company OBM inc. “If you turn off a bitcoin mine, the mine stops generating bitcoin, but that’s about it. There’s no impact on the user.

OBM Inc. created the crypto-mining management platform foreman to help miners better manage the power consumption of their hundreds of devices that process transactions on the blockchain. This process aims to offset an environmental impact that has allowed bans in countries such as China, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia and Bangladesh.

“If you disable a bitcoin mine, the mine stops generating bitcoin, but that’s about it. There is no user impact.”

Daniel Lawrence

The software allows businesses like standard powerwhich builds and maintains enterprise-level bitcoin mines for clients, to automate the shutdown of bitcoin mines in five minutes (it took two hours to do manually).

In 2018, the company purchased 125 acres of what was once a paper mill to create a bitcoin mining data center in Coshocton, a town about 78 miles northeast of Columbus. The WestRock Paper Mill had closed in 2015, leaving hundreds unemployed. It’s a centuries-old story of manufacturing leaving a small town and its people dry. Places like Coshocton are hoping the new cryptocurrency infrastructure market can revitalize the city. Mayor of Coshocton Steve Mercier even boasted that renovating the factory into a cryptocurrency operation would lead to 100 jobs and $100 million in technological infrastructure.

“At this level of scale, we basically have a community development project,” said Maxim SerezhinCEO of standard power.

What makes towns like Coshocton attractive to Bitcoin miners is the old industrial infrastructure, the proximity to natural resources (like the Utica and Marcellus Shale gas formations) creating excess energy capacity for the state and proximity to fiber optic data centers to reduce latency. In rural Pennsylvania, bitcoin mining has taken place using coal waste as fuelsparking debate on issues ranging from carbon footprint to noise pollution from bitcoin mine electricity generators using natural gas. These debates echo a broader conflict over what it takes to actually mine Bitcoin that was played elsewhere as the recent crypto crash coincided with call for more watch.

OBM, CPower, and Standard Power want to change the stigma around Bitcoin mining by offering a solution to power issues instead of a problem.

“It’s a partnership with the community where we give the community what they need most, when they need it most, just when the community needs power the most,” said Serezhin. “At times like these, we’re able to close our business and say we can share the resource we have with the community and our ability to do that fundamentally changes everything.”


Donte Kirby is a 2020-2022 corps member of Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Robert W. Deutsch Foundation. -30-