A unique characteristic of many upstate New York cities is their low energy rates. Hydroelectric dams along the St. Lawrence river give residents electricity so cheap that many even heat their homes with it. The region made perfect sense for crypto miners during the “gold rush” days of 2017 and early 2018, and the increased demand from the Bitcoin mining industry created the problem of increased electricity demand driving up the costs.
Mining Premiums & Government Action + Crypto Winter = Toxic Environment for Bitcoin Miners
Some municipalities like Lake Placid put a ban in place, learning from the experience of nearby communities like Plattsburgh. However, last year the New York State government ruled that power providers could charge miners more for electricity, to offset costs for locals. This, combined with an extended bear market for the proceeds of mining, has led to many of them closing up shop.
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According to Albany Times-Union writer Rick Karlin, just one major operation remains in the region, Coinmint. The company has two facilities in Plattsburgh and one other opening in Massena, New York. The company is currently in the process of launching an ICO. Hopefully, it doesn’t go the way of the WATT token. Reportedly, the company’s laid off just 15 people during the Crypto Winter so far.
Some people cited in the article are working on dual-purpose mining technology, using the heat generated as a supplemental heating source. A local named Ryan Brienza says that bans on mining expansion put a damper on his plans, but that he is working hard to create a solution which uses crypto miners to heat homes.
Bitcoin Mining Down Across the Board
New York, of course, is not the only place to have a decline in crypto mining. Globally speaking, the number of miners has dropped.
The network difficulty for Bitcoin saw a steep drop in October and has not yet recovered to those levels. The network difficulty is a good way to measure the number of miners and hashpower on the network: the higher the number, the more miners and hashpower going into Bitcoin. October, of course, was when Crypto Winter turned truly frigid, as the price began to drop dramatically.