After bitcoin mines trigger energy price spikes, mayor calls for ban
Colin Read has nothing against bitcoin — but he says his city has been overwhelmed with how much power the digital currency mining operations have consumed since they set up shop in Plattsburgh, N.Y.
"I'm a little bit of a nerd myself and I love computers and I'm very interested in this whole phenomenon," Read, the mayor of Plattsburgh, told As It Happens host Carol Off.
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"We're just really worried about the health and safety concerns of such large scale production."
That's why Read has proposed a law that would put an 18-month moratorium on any new, large-scale bitcoin mining operations opening up, while the city drafts new regulations around zoning and electricity use.
Bitcoin mining operations are essentially warehouses full of computers that solve math problems, and then are issued a certain amount of the digital currency in exchange. The computers must be plugged in at all times, they run hot, need to be cooled down and use a lot of electricity.
One study found that bitcoin mining around the world used more power than the entire country of Ireland last year.
"Sometimes they'll get a thousand or two thousands of these units in, each using up about an equivalent amount of energy and generating about the same amount of heat as a small little space heater," Read said.
The value of bitcoin fluctuates wildly, from $7,000 US to $12,000 US.
Although there's only a couple large scale operations in Plattsburgh, Read said they're already using 20 per cent of the city's power supply.
Plattsburgh is an ideal location for a bitcoin mining operation because it has some of the cheapest electricity rates in the country. The city gets a fixed amount of electricity from hydroelectric dams on the St. Lawrence River as part of a deal signed in the 1950s.
It allows the city to sell power to its residents at about a third of the normal rates.
The problem is, once the city goes over their fixed amount, they have to buy it from what's called a "spot market" — and it can be very expensive.
"You're paying 20, 50, 100 times more for the power that we normally wouldn't have to. And that then is shared amongst all the ratepayers, not just the bitcoin miners that have put us over the edge," Read said.
Read said the city usually goes over the power limit when it is very cold or warm out, and he would like to work with the bitcoin miners to shut down the operations during these critical times.
One of the known bitcoin mining operations in Plattsburgh is in an old paper mill, which used to employ many residents of the city. Now, there is usually only one person employed to watch the machines and make sure the fans ejecting the heat are operating properly.
Read finds this use of electricity discouraging.
"I can't blame someone for investing in us from out of state or even out of country in this case. But what we really want to try to do as a city is build community and generate local jobs," he said.
"That to me is a healthy community."