Bitcoin Mining Is Profitable, If You Generate The Power

The New York Finger Lake Region is known for its wine and glacial formed waterways. It is a beautiful place. And it now it qlso hosts a Bitcoin mining facility..

Greenidge Generation is a former coal-fired electrical power plant that has converted to natural gas. They supply electrical power to New York State's residents. Every day Greenidge has to bid in a competitive power market – sometimes, they make a profit when energy demand is higher. The company has been in business since 1937 but, in the last decade, suffered against cheaper power sources. The facility was mothballed in March 2011. Competition from cheaper shale natural gas supplies and coal exports from China put the old company into economic distress. Atlas Holdings bought the plant in 2014 and converted it to natural gas in 2017.

Atlas, which buys and transforms distressed industrial companies, helped turn the company into a more efficient energy model. But profits were always tight. It was in 2018 that CEO Dale Irwin and CFO Tim Rainey had the idea to use excess capacity to mine Bitcoin. This was a unique idea in the United States. Rainey says, "Cryptocurrency mining was an idea that evolved following discussions with our Board and Leadership team, as we explored the best way to utilize the unique assets we have at the facility. Our Board approved a plan to pursue Bitcoin mining."

Dale Irwin said, "We started with a couple of S9's and some GPU rigs in early 2018 to familiarize ourselves with the economics of the machines and learn how to operate and run them. We turned that into a small test pilot of several hundred machines from many different manufacturers in May of 2019. After completion and analysis of the test pilot, we built the current data center within four months, starting our larger-scale mining operation in January 2020." They currently operate 8,500 of the latest generation miners from Bitmain and other manufacturers.

Greenidge is using over 20 megawatts (M.W.) of power to mine Bitcoin, which makes it the largest energy company in the U.S. with this kind of strategy. In comparison, 20MW is not very big, next to other countries. There are larger Bitcoin mining facilities. Global power use is estimated to be 7.25 Gigawatts (G.W.), where China is shown to use a bit over 71%.

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