The fightback against the bitcoin energy guzzlers has begun

In towns and cities surrounding the Niagara Falls, US and Canadian authorities are grappling with a surge in bitcoin miners earning big bucks thanks to cheap hydroelectric power.

Thanks to nearby Niagara Falls, Plattsburgh has a quota of cheap electricity available at a low rate - 2.7 cents/kwh for residential or five cents/kwh for industrial use – against a US average of seven or eight cents. The general rule of thumb for those wanting to compete with Chinese miners is to keep electricity costs at four cents or less, according to Shone Anstey, co-founder of Blockchain Intelligence Group. And so Plattsburgh’s prices have attracted cryptominers to the region since late 2016 and the city now hosts two large miners, six medium-sized operations and hundreds of hobbyists. This added nearly $10 to residents electricity bills for January.

“These companies are using extraordinary amounts of electricity – typically thousands of times more electricity than an average residential customer would use,” according to a spokesperson for the department. “The sheer amount of electricity being used is leading to higher costs for customers in small communities because of a limited supply of low-cost hydropower.” WIRED contacted the two largest cryptominers in the city - Plattsburgh BTC and cryptomining company Coinmint's subsidiary North Country Data Center for comment, but neither offered a response.

Plattsburgh was just the beginning. In spring, the People’s Bank of China started shutting off power to large server farms mining bitcoin while, in June, the regional government in the Canadian province of Québec blocked all new requests for hydroelectric power from cryptocurrency-mining operations. In Iceland, the finance minister has warned that cryptocurrency mining – which uses more power than the nation’s entire residential demand – could severely damage its economy. Is the libertarian dream of bitcoin as an unregulated global currency about to be destroyed by municipal electricity companies?

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