If, in 2017, you had taken a gamble and purchased a comparatively new digital currency called Bitcoin, today you would be a millionaire many times over.
At the time, Plattsburgh had some of the least expensive power anywhere in the United States, thanks to cheap hydroelectricity from the Niagara Power Authority.
It didn’t take long for a subsidiary of the popular mining firm Coinmint to lease a Family Dollar store in Plattsburgh.
When the miners wanted to expand into a nearby shopping center, Bill Treacy, the manager of the Plattsburgh municipal lighting department, told them that they would have to invest $140,000 in new infrastructure.
The city quickly exceeded its quota of hydropower, forcing it to buy power elsewhere at much higher rates.
Those fans generated a constant, high-frequency whine, McMahon says, “like a small-engine plane getting ready to take off.” It wasn’t just the decibels, but the pitch: “It registers at this weird level, like a toothache that won’t go away.” Carla Brancato lives across the river from Zafra, a crypto-mining and hosting company owned by Plattsburgh resident Ryan Brienza.
“I’m pro–economic development,” Read says, “but the biggest mine operation has fewer jobs than a new McDonald’s.” Plattsburgh doesn’t have a city income tax, and most miners lease their buildings, meaning they aren’t paying property taxes.
Read, who became mayor in 2017, decided to impose a moratorium on new crypto mines until the city could figure out what to do.
Zafra’s new facility, he says, has made noise reduction a priority; Brancato says after the city worked with Zafra to turn down its fans last summer, her home is finally quiet.
“Our goal is not to prevent business, but to make sure the character and safety of our town is protected,” wrote a town board member in an emailed statement.
Economist Matteo Benetton, a coauthor of the paper and a professor at the Hass School of Business at the University of California, Berkeley, says that crypto mining can depress local economies.
Benetton says there are strong profit incentives to keep as many servers running as possible, and he is now calling for greater transparency in these companies’ energy usage.
When China banned crypto mining in 2021 to achieve its carbon reduction goals, operations surged in places like Kazakhstan, where electricity comes primarily from coal.
In a recent working paper, he found that cryptocurrency’s energy usage will rise another 30% by the end of the decade—producing an additional 32.5 million metric tons of carbon dioxide a year.
Those 32 million metric tons of carbon dioxide will make the climate crisis even worse, whether the emissions are coming from upstate New York or Kazakhstan.