The Plattsburgh town in New York State has an old paper mill that reportedly turned into a Bitcoin mining operation recently. A manufacturing start-up moved into an aluminium factory to take advantage of abundant cheap electricity from the St. Lawrence River to power the cryptocurrency.
The bitcoin mining in all probability is not labour intensive, and there is a diversion of energy, time, and capital from productive activities that economists’ state could fuel faster growth. James McAndrews, the former head of research at the Federal Reserve Bank of New York stated that much of the evolving digital infrastructure was devoted to activities like the proliferation of cyber coins.
In the backdrop of America’s productivity problem, some economists find that people are investing their time and natural resources on the virtual currencies. The largest virtual currency, bitcoin, is reportedly a consumer of resources and is said to be distributed in a lottery-system with the tickets being purchased with electricity. Each bitcoin is said to be valued at $10,550 and Bitcoin-believers state that the currency would come into wide circulation and would be used in applications for digital bookkeeping method, blockchains, and more.
The mayor of Plattsburgh, Colin L. Read stated that the city was guaranteed a fixed supply of cheap electricity to facilitate the power-generating dams, and the bitcoin mining companies were plugging into that power supply. He added that the mining operations were consuming 10% of the city’s power forcing the town to buy extra electricity on the open market at rates that were 100 times higher than the base cost.
Meanwhile, New York Power Authority reportedly reserves 490 MW of low-cost power for industrial users inclusive of Jefferson, Franklin and St. Lawrence counties including the Massena town. And, when the company Coinmint proposed to install 16,000 computers in the old aluminium building it was welcomed. The company has told the power authority that it would employ 150 people, and reportedly proposed to create new 10 jobs per megawatt.