Bitcoin mining requires a significant amount of power, which has led cryptocurrency miners to rural areas to mine coins using inexpensive electricity. Rural and suburban areas of Washington State in the United States and Iceland are experiencing a new “gold rush” as bitcoin miners flock to these areas and set up shop next to power generation plants. The move to rural areas for cheap power is front and center as crypto currencies news.
Moving Next to Dams
The Columbia River in Northern Washington State has some of the least expensive electricity available in the United States. The river runs through hydroelectric dams which provide inexpensive power to residents within the area. The area is rural and has recently become a hotbed for bitcoin miners who are attracted to the areas because of the inexpensive power. The process of mining a bitcoin requires heavy duties computers, which run on enormous amounts of power. The operation size is relatively small, as the servers that are currently used are tiny in stature. The servers that are used to generate a bitcoin can be stored in a 30-30 room and use as much power as 1,000 homes. Miners appears to have taken over some small business operations such as old toy stores and warehouses.
A Wall Street Journal story that focuses rural Washington State reports that there are 30-known bitcoin mining operations in Grant, Douglas and Chelan counties in Washington State. Obvious the surge in price up to $19,000 attracted many new operations, the question is whether these operations will be viable now that prices have corrected back to the $8,000 level.
Why do Bitcoin Miners Need So Much Power?
Bitcoin mining is a process were complex equations are solved for the verification process to take place. To verify that a bitcoin is legitimate, miners find blocks of transaction, that tell them all the trades that have taken place with that block of transactions over time. Bitcoin miners use hundreds of computer servers to solve these equations. Additionally, there is a need for cooling units to keep the temperature at a level that will allow these computers to function normally.
Can Utilities Handle the Load?
Utilities are constantly getting applications and inquires from bitcoin miners, which is driving up the price for residents. Bitcoin miners have also been flocking to Iceland where electricity is also inexpensive. Reports show that in 2018 bitcoin mining operations are likely to exceed the needs for all of Iceland’s homes. The issue is that if all of these applications for high level use of power are granted there will not be enough power for local residence. Bitcoin mining within Iceland will grow to 840 gigawatt hours of electricity which will supply data center operations and cooling systems for the computers used to generate bitcoins. This compares to approximately 700 gigawatt hours used for all of the homes in Iceland each year.
Presently, many of these rural areas are complacent about the draw on their electricity because the increase in population and spending are compensating for the draw on their power. If power becomes to scarce this issue might turn ugly.