Burning for Bitcoin – Pittsburgh Post-Gazette Interactive


Jeff Campbell, the plant engineer, began researching Bitcoin as quickly as he acquired residence from Mr. Spence’s home in 2017. He watched a 40-minute YouTube video and stated the thought clicked into place: “That is foreign money that’s underpinned by energy.”

On Amazon, he purchased a $50 USB stick that promised to mine Bitcoin. He switched his pc to an remoted community and plugged it in.

At the moment, Bitcoin was nonetheless “fringe,” Mr. Campbell stated, and he nervous about getting a pc virus and even ending up on an FBI watchlist due to cryptocurrency’s status in shifting funds for terrorism.

Jeff Campbell, Scrubgrass energy plant’s engineering supervisor, realized how rapidly Bitcoin mining might generate income. (Andrew Rush/Put up-Gazette)

The USB stick labored as marketed, and after a number of weeks, Mr. Campbell invested $1,000 and purchased a mining machine, a pc whose sole function is to run computations. It ran for per week and generated the equal of $6.65 in Bitcoin.

Nervously, Mr. Campbell linked the machine’s digital pockets to Scrubgrass’ PNC account to switch the spoils, then he went into the workplace to verify if it actually confirmed up there.

“Oh, my God. I can’t imagine that is actually going to work,” he stated

“All we have to do is put 15,000 of those in,” he instructed Mr. Spence. “$6 a day, seven days per week, three hundred and sixty five days a 12 months. That’s not small cash. Now multiply that by 15,000.”

That will be $230 million a 12 months.

The earnings from the primary machine funded the acquisition of the second, then these two funded the third and so forth.

At present, there are about 3,000 cryptocurrency miners packed into retrofitted transport containers behind the facility plant, most of them owned by Stronghold and a few that belong to different mining corporations that purchase energy from the plant. One other 5,000 machines are scheduled to reach subsequent month. In accordance with paperwork filed with the SEC, Stronghold is planning to function 57,000 miners by the top of subsequent 12 months.

A financial institution of Bitcoin mining machines on the Scrubgrass waste coal energy plant.  (Andrew Rush/Put up-Gazette)

In 2020, when the facility plant seldom ran, Stronghold made extra money from its Bitcoin operations than by promoting Scrubgrass’s vitality to the grid. Throughout the first three months of this 12 months, the pattern reversed. It acquired virtually $2 million from energy gross sales and greater than $1 million from its crypto datacenter.

Mr. Spence talks to his children about blockchain, the cryptography concerned in storing and verifying large swaths of knowledge, the way in which folks within the Nineteen Sixties talked about plastics, a la the film “The Graduate.”

“I really feel that blockchain is gonna change the world,” he stated.

For Mr. Campbell it looks like the start of the web did: He is aware of it’s going to be revolutionary and ubiquitous, however the imaginative and prescient continues to be fuzzy. “Facial recognition? Three-dimensional rendering? Autonomous driving? Synthetic intelligence?” he spitballs.

Mr. Spence’s enterprise associate, Mr. Beard, who used to handle vitality investing at Apollo International Administration Inc., isn’t as exuberant.

“I’m undecided that you must be a believer,” he stated.

He plugged the numbers into an Excel spreadsheet and noticed that it makes financial sense to mine. That was sufficient for him.

Stronghold is shopping for one other waste coal plant, Panther Creek Power Facility in Carbon County, with plans to copy its cryptomining information heart there, and is eyeing a 3rd.

Stabilizing the grid

A bulldozer is parked on the Russellton waste coal pile in West Deer. (Andrew Rush/Put up-Gazette)

Whereas Bitcoin is the shiny veneer of the operation, it’s really a way to an finish — giving Scrubgrass a purpose to run greater than the electrical grid wants so it could proceed to burn waste coal.

For the primary 20 years, the plant ran practically continuously. It had an influence buy settlement with the native utility, which meant there was a assured demand and a assured worth for its output.

When that ended, in 2013, Scrubgrass struggled to navigate the aggressive energy market, the place the worth of energy was falling partially as a result of the Marcellus Shale was making pure fuel a less expensive gas for electrical energy than coal, not to mention waste coal.

Crops — particularly smaller ones like Scrubgrass that discover themselves on the margin — usually run solely at peak occasions when the demand on the grid raises costs sufficient to make it price their whereas.

Having a relentless demand, just like the connected information heart, means Scrubgrass doesn’t have to shut down when costs for energy fall. It additionally implies that when the grid wants it, Scrubgrass can act like a battery — immediately switching its energy to the grid.

(Andrew Rush/Put up-Gazette)

“I feel 10 years from now, individuals are going to say, ‘Bitcoin is the factor that energy vegetation do to control the grid,” Mr. Campbell stated.

He’s already pondering of the way to route the warmth produced by the miners again into the facility plant. (Final winter, Mr. Campbell heated his residence with Bitcoin machines).

In the meantime, the plant, though no spring rooster, feels prefer it’s nonetheless attempting to determine what it’s — a spot the place folks tinker and experiment. Mr. Shaffer, who spent most of his profession on the plant, proudly proclaims that his colleagues aren’t “typical energy plant folks.” A former restaurant supervisor runs the information heart.

Mr. Spence, not a typical something besides an entrepreneur whose ventures over time ranged from pure fuel providers to a well being journal, hung the framed picture of Scrubgrass simply contained in the entrance door of his residence.

“They need to be constructing extra vegetation like this, not much less,” he stated not too long ago. “It’s not good. I acknowledge that to you. Nevertheless it’s rattling good.”

Anya Litvak: alitvak@post-gazette.com

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