Some people may consider cryptocurrencies to be as imaginary as Monopoly money but they are creating real world headaches in Plattsburgh, New York.
Two bitcoin “miners” who started operations in January have created so much demand for electricity that prices in the town have almost tripled for many homeonwers and businesses.
“Our monthly bills used to be about $200,” said the owner of the Sammich Shop in downtown Plattsburgh. “Now they’re closer to $600 and it’s all because of the bitcoining mining.
The power price surge has led the town council to pass a temporary moratorium on new mining until they can sort out how to allocated the costs of the new power demand. The measure called for a half of 18 months but town leaders are weighing alternative measures in an effort to reduce the length of time that new business would be kept away.
Cryptocurencies are created using large quantities of computing power to run complicated algorithms that track lengthy encrypted numbers among the currency users. In Plattsburgh some 7,500 servers sitting in some 50 shipping containers in an old warehouse are running around the clock, creating some 8 to 12 new bitcoins every day worth around $100,000 based on the current price ranges.
Both the computers themselves and the chillers that keep them cool consume electricity supply. Plattsburgh’s miners are using over 10 megawatts of energy per hour, almost as much as the rest of the town put together.
Initially the miners were attracted to Plattsburgh because of its cheap electricity prices. For years the town’s Municipal Lighting District has enjoyed an allocation of inexpensive hydroelectric power from Quebec, resulting in costs of about $.025 per kilowatt hour or close to half that of neighboring utility New York State Electric and Gas.
As a result of the mining operations, the Municipal Lighting District has been forced to purchase more expensive supply generated from natural gas, resulting in a sharp increase in pricing.
During the moratorium town leaders will attempt to craft a solution that will protect long time residents and businesses from higher prices while not unfairly taxing the new businesses.
Meantime, miners have entered Massena, another upstate New York town in St Lawrence County, where there activities could drive demand on other utility prices.
