Coinmint signed a lease for the 1300 acre Alcoa site in Massena, New York, which has a 435-megawatt power capacity, on December 1, 2017. Operations to convert the space into a cryptocurrency mining farm are now underway after a reported $50 million investment. Significant expansion is planned for the next 12 months, which is expected to bring the total investment to $700 million dollars.
The data center, near the Canadian border, will create an estimated 150 or more jobs and will mine the cryptocurrencies bitcoin, Dash, and Ether.
"The start of operations is a key milestone towards the Massena site reaching its full capacity," said Coinmint spokesperson Kyle Carlton.
Significant to the development, amid concerns over cryptocurrency mining power usage, is the plan for the site to run on hydroelectric power.
"The area's citizens and its hydroelectric power – a green alternative to the less sustainable energies used at other digital asset infrastructure data centres – were the catalyst for our move and will be foundational assets for continued expansion," said Carlton on choosing the Alcoa site. "The reduced electricity costs will enable us to compete in the rapidly emerging digital currency global marketplace."
Miners are rewarded in cryptocurrency based on the capacity of each operation, but this work takes massive amounts of heat-generating computer processing power and electricity to drive the necessary algorithmic calculations. For this reason, cryptocurrency mining companies seek out lucrative locations where electricity prices are low and climates are cooler.
American states and Canadian provinces have wrestled with the choice between valuable incoming investment and the extra strain and cost on their power networks. The state of New York's public utilities arm ruled in March 2018 that power authorities could charge higher electricity rates for cryptocurrency mining operations. In the same month, the economist Alex de Vries published a paper estimating the Bitcoin network was consuming 2.55 gigawatts of energy, and that usage could rise to 7.67 gigawatts by the end of 2018. The latter figure is comparable to the energy consumption of a small country.
New York is reportedly the largest renewable hydropower producer in America's northeast with three plants accounting for 28.7 gigawatts of annual electricity production. Hydroelectric power plants are roughly twice as efficient as fossil fuel plants, with less detrimental effects on the environment and natural resource depletion.
Coinmint was granted a conditional allocation of 15,000 kilowatts of energy in March 2018 after outlining its investment and job creation plans for the Massena site. Alcoa closed the aluminium smelting operation four years ago and has agreed to a 10-year lease with Coinmint.
"The thought of 150 jobs and revitalization of the Alcoa East Facility is exciting and what we have been working for. We are ready to provide any assistance we can to move this project to its full potential," said Steve O'Shaughnessy, Massena town supervisor.