This Utility Heats New York State—And Mines Its Own Bitcoin

(Bloomberg) -- A power plant in New York's Finger Lakes region has set up its own Bitcoin mining operation, using the electricity it produces to generate about $50,000 worth of the virtual currency every day.

Atlas Holding LLC, the private-equity firm that runs the operation, has installed some 7,000 crypto mining machines at the Greenidge Generation plant in recent months that can mine about 5.5 Bitcoins per day. The 65,000-square-foot facility in Dresden, New York, was built in 1937 as a coal plant and later converted to natural gas.

The machines work off so-called “behind-the-meter” power, which makes it extremely low cost, the private-equity firm said. Because powering crypto mining machines is usually so energy intensive, miners have been roaming the world seeking out cheap electricity, such as that available from hydro power plants. Many met with an unwelcome surprise, when those utilities jacked up prices. But Greenidge said it's power costs are predictable and low -- essentially, just costs of production, which can be offset by power-related services.

The server farm consumes about 15 megawatts of the 106 megawatts of capacity that the plant produces. While in the past the plant used to only run during times of peak energy demand -- during summer or winter -- it's now operating year round.

Bitcoin rose Thursday for the first time in three days, gaining 4% to $9,084 as of 9:20 a.m. in New York.

While all Bitcoin miners are going to be impacted by so-called halvening, slated for May, when rewards the network issues to miners will be cut in half, the plant's owners believe they will still remain in the black.

“We are in a favorable market position regardless of how the halving materializes,” said Tim Rainey, chief financial officer at Greenidge. “Due to our unique position as a co-generation facility, we are able to make money in down markets so that we're available to catch the upside of volatile price swings.”

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Brendan Walsh

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