Bitcoin webinar looks at currency details
FINGER LAKES--With Bitcoin operations becoming more prevalent as the technology evolves, the environmental non-profit Committee to Preserve The Finger Lakes hosted a webinar Tuesday, Jan. 19. The presentation helped to educate the public on Bitcoin and the impact of the production facilities. The recent conversion of Greenidge Generation on the west side of Seneca Lake from a grid power plant to a private bitcoin operation has brought significant local interest in the cryptocurrency. The webinar featured former Plattsburgh Mayor and current finance professor Colin Read.
Bitcoin is a digital currency used online to give money to another party without an intermediary. This type of transaction is called peer-to-peer. To utilize this payment method, a user will have an online wallet that can be used to send or receive Bitcoins over the internet. Every transaction is recorded in a ledger and anyone can set up computing power for the network to complete the transactions. A reward is paid for the use of the computing power to complete the transaction. Although the word mining is typically used to describe this process, there is no mining in the form of physical excavation as the word is typically used. Rather Bitcoin mining refers to the extraction of value through the use of computers.
Typically there are two major challenges that make this process difficult to be profitable for most companies. The first issue is the computers that perform the mining use a large amount of power. The second issue is the computers need to be kept cool.
"I want to teach you a bit how cryptocurrency works because often the industry tries to purport it to be something that it is not, something too advanced for you all to understand and it isn't," Read said.
"Every 10 minutes a Bitcoin is mined or discovered by one machine of which there are millions around the world," Read stated. "But only one machine receives that Bitcoin, and if you have a big operation you might mine a bitcoin once a day or multiple times a day, (which is currently worth roughly $36,000.)"
The more machines you have the more odds you have to be able to mine a Bitcoin.
"On average only one machine wins every 10 minutes or so, so they are all competing for that prize and [using] a huge amount of electricity in the process to be able to encode (the new Bitcoin)," Read said.
The system, which is designed to prevent one individual or entity from being able to have access to the code of massive amounts of individual Bitcoin, is not hard to participate in.
"So this is not very complicated, if you bought one of these machines, which you can buy one for about $500 on the internet, it might take a novice an hour or two to maybe set up their first machine, the technology is not very complicated... so this is not rocket science," Read said.
Plattsburgh, where Read was the former mayor, was originally attractive for Bitcoin mining operations as a result of incredibly low utility costs combined with access to the massive amount of water in Lake Champlain. This resulted in Read helping to create a series of new local laws to ensure the industry would not drive up utility costs for residents or endanger the public.
The Greenidge Generation Plant, a Torrey based Bitcoin operation owned by Atlas Holdings in Connecticut, operates in a converted natural gas power plant and is currently in the permitting process to expand the operation. The facility offers the advantage of drawing power "behind the meter," as the generation occurs on-site and Seneca Lake water can be used for cooling the computers.
Concerns about greenhouse gas emissions and the impact on Seneca Lake have been the focus of groups opposing the project. They have sued to bring awareness of the project and the expansion. No court date has yet been scheduled.
"Greenidge is discharging water at up to 108 degrees into the Keuka Outlet, which empties directly into Seneca Lake, which stresses trout and other cold water fish, and increases risks to spawning which occurs yearly in the stream," said Kate Bartholomew, of the Sierra Club Atlantic Chapter. "The hot water will increase incidences of Harmful Algal Blooms, exacerbating an already troublesome issue for the Finger Lakes. Furthermore, the system is not using protective measures to prevent fish, eggs, and other aquatic life from being killed at their water intake location."
"We in the neighborhood and Seneca Lake watershed, really want to understand more the impact not only on the economy but on the environment," said Abi Buddington, representative for the Committee to Preserve the Finger Lakes. "We and others have raised a lot of concerns about the discharge of water, water withdrawal issues, the fact there aren't fish screens right now, greenhouse gases and the noise and concerns about increased operations,"
Buddington said CTPFL reached out to Read to conduct the webinar to help further educate the public on the subject.