A remote corner of New York, which once attracted heavy industry, is coping with an influx of Bitcoin speculators, lured by an abundance of cheap electricity
A region that once attracted heavy industry is coping with an influx of Bitcoin speculators, lured by an abundance of cheap electricity. Tweets: @davecullen , @ryanvlastelica , @dannorberts , and @nickconfessore Tweets: Dave Cullen / @davecullen : Wow. Fascinating stuff. Stunning that they can pollute as much carbon as a medium-sized country! “#Bitcoin Miners Flock to New York's Remote Corners, but Get Chilly Reception” https://nyti.ms/2Nlfkc6 Ryan Vlastelica / @ryanvlastelica : Something very on the nose about a former manufacturing hub (made parts for Apollo 11!) now drawing people who use factory space to... mine digital currencies. https://nyti.ms/2Nlfkc6 Dan Norberts / @dannorberts : “The only reason they're here is this unusually inexpensive rate for power,” Mr. Recny said. “But with two guys, they can consume more electricity than a hospital.” #bitcoin #blockchain #cryptocurrency # https://nyti.ms/2Nlfkc6 Nick Confessore / @nickconfessore : A two-man cryptocurrency mine set up shop in in Upstate New York, drawn by cheap hydropower. They used so much they drove up rates for all the other customers. Fascinating story from @NYTpatrick https://nyti.ms/...
Context & Ripple Effects
In 2018, upstate New York's cheap hydropower — the same asset that once anchored heavy industry, including parts for Apollo missions — became the draw for Bitcoin speculators, and the reception was hostile from the start: miners consuming large amounts of low-cost power pushed electricity rates up for other customers while producing carbon emissions on the scale of a medium-sized country.
The arc since then has only sharpened that tension. A New York power plant went further than hosting miners and set up its own behind-the-meter Bitcoin operation of roughly 7,000 machines, and another fossil fuel plant was restarted to mine crypto just as New York weighed a three-year moratorium on the practice. By 2023, the same dynamic had spread to 34 US mines whose extreme energy demand was raising electricity costs for locals in Texas and beyond.
First-order effects
- Local residents and businesses in remote New York pay higher electricity rates as miners absorb the region's cheap hydropower supply, converting an industrial-era subsidy into a cost for everyone else.
Second-order effects
- Power producers stop selling to miners and become them: the New York plant's own ~7K-machine mining rig shows generators capturing the margin directly, and restarting a fossil fuel plant for mining reverses the region's decarbonization trajectory.
Third-order effects
- If the pattern holds, cheap-power regions face a policy fork — New York's proposed three-year moratorium is the template — between exporting their energy advantage to crypto or legislating it away, with the outcome deciding whether stranded industrial capacity gets a second life as compute infrastructure.
The trend: Regions with abundant cheap electricity are becoming contested compute territory, where crypto miners' grid demands force a choice between welcoming energy-intensive industry and regulating it out.