4 5 1 4 1 2 1 . Is Bitcoin a Waste of Electricity, or Something Worse? Tom Pillsworth, right, whose company operates and maintains Bitcoin machines located at a former paper warehouse in Plattsburgh, N. WASHINGTON — A manufacturing start-what is bitcoin mining modules in social studies recently announced plans to move into a shuttered aluminum factory in upstate New York, taking advantage of abundant cheap electricity from the St.
Instead of smelting aluminum, however, the company plans to turn that power into Bitcoins. Money is supposed to be a means of buying things. Now, the nation’s hottest investment is buying money. And the investment rush is raising questions about whether one reason for the slow pace of economic growth in recent years is that the nation is busy distracting itself. While Bitcoin mining may not be labor intensive, it diverts time, energy and capital from other, more productive activities that economists say could fuel faster growth. By a wide range of measures, America has a productivity problem.
The economy is growing slowly, and almost 20 percent of adults in their prime working years are neither working nor trying to find work. Tom Pillsworth sets up equipment at the Bitcoin mining facility in Plattsburgh, N. Bitcoin, the largest virtual currency, is a particularly voracious consumer of resources because new Bitcoins are distributed in a kind of lottery where each ticket is purchased with electricity. Bitcoin miners compete for the coins by submitting answers to difficult math problems. Instead of solving the problems, miners use computers to submit a flood of guesses. Believers insist it is a worthwhile endeavor.
But Bitcoin remains so hard to use that a major Bitcoin conference in January had to stop accepting Bitcoin. It is, in practice, a speculative investment, like gold. Read, the mayor of Plattsburgh, N. The city was guaranteed a fixed supply of cheap electricity as part of the construction of power-generating dams on the St.
Bitcoin mining companies are plugging into that power supply like a swarm of hungry mosquitoes. Read said that Bitcoin mining now consumes about 10 percent of the city’s power, and that is forcing Plattsburgh to buy a growing amount of extra electricity on the open market, at rates up to 100 times higher than its base cost. Read, who is also an economics professor, said he would rather sell the city’s supply of cheap power to companies employing large numbers of people. Mold-Rite Plastics, which makes bottle caps, also uses about 10 percent of the city’s power, but it employs about 200 people.
Mold-Rite Plastics, a maker of bottle caps in Plattsburgh, N. Bitcoin miners, but employs about 200 people. Bitcoin companies have begun moving into space at an old paper mill in Plattsburgh, N. A few years ago, he rented a room in an old paper warehouse, where he runs the specialized hard drives around the clock. They sit side-by-side on wire racks, fans whirring to dissipate the heat. About half a dozen other mining companies have since moved into the same building. Bowman, who is from Plattsburgh, said he sympathizes with the mayor’s concerns.
He is the only employee of his company, and he is presently a full-time medical student on the Caribbean island of Grenada. But Bitcoin mining paid his college tuition and it is paying for medical school. And he doesn’t see that Plattsburgh has better options. He does pay fees to an investor-owned company that operates and maintains the machines and has one employee. Other governments also are grappling with the merits of virtual currencies. Enel, the largest European power company, said earlier this month it would not sell electricity to a virtual miner, citing environmental concerns.