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Excavating the Truth Around the Bitcoin Mining Discourse

Last year, a group of CoinDesk reporters traveled to Seneca Lake to examine the effect Greenidge Generation – a resurrected power plant that now mines bitcoin – had on the surrounding communities. Though we expected to hear locals say they disliked the plant and its continued operation, we found the opposite.

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

Misinformation snowball

The narrative

Bitcoin mining is proving increasingly controversial, partly due to the sheer energy needs and partly because the crypto community hasn’t yet convinced its critics that there is value to this whole thing.

Why it matters

Much of the debate around crypto mining lacks nuance or context.

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These debates are having an impact on policy, and the lack of accurate information about these datacenters is directly affecting people who live near them. We’re seeing every facet of this debate get based on an alternative reality, what my colleague Cheyenne Ligon described as a “misinformation snowball.” Today’s article is an effort to tamp that down, at least as this issue pertains to Greenidge Generation, a facility operating on the shore of Seneca Lake, New York.

Breaking it down

Last summer, CoinDesk’s Cheyenne Ligon, Doreen Wang and Nolen Hayes and I drove to Dresden, N.Y. to visit the controversial Greenidge Generation mining facility. My expectation was we’d find a power plant that infuriated its neighbors, sparked algal blooms in nearby Seneca Lake and adversely affected the broader community.

Greenidge, after all, was the source of many headlines, ranging from reports about how it was boiling the waterways to introducing fresh pollution to the delicate environments nearby.

What we found was something entirely different, refuting my prior expectations and demonstrating that the situation was far more complex and nuanced than expected – and possibly unique among the broader crypto mining conversation in the U.S.

CoinDesk’s report, which we published earlier today, can be found here. I wanted to also offer a first-person perspective on how we reported this story and what we learned.

One important disclaimer: This report solely focuses on the experiences of one community in a unique environment. Other mining facilities tap into existing energy grids or build their own warehouses, and those communities will have their own experiences. In other words, our report today focuses on Greenidge Generation and its surrounding communities. It cannot be compared to Riot Platforms in Rockdale, Texas or rogue mining operations in Chelan County, Washington or even Coinmint in nearby Plattsburgh, N.Y.

We make this same point in the article itself because it’s worth making. The article isn’t a defense of bitcoin mining or the philosophical question of whether bitcoin is worth the energy costs. Our goal is to show how a conversation that doesn’t include the people most directly impacted can lead to wonky outcomes.

One of the most stunning claims we uncovered in reporting this article was that no one – none of the critics or lawmakers passing legislation due to Greenidge, nor any of the bitcoiners defending the industry – had reached out to the towns near the facility. William Hall, the mayor of Dresden, N.Y., told us “nobody has ever come to talk to us about” Greenidge. We checked again prior to publication – we’re still the only ones to have visited.

Between this and the cascading series of failures and bankruptcies that shook the crypto market over the last few months, we weren’t able to approach this article with the attention it deserved.

Then, earlier this year, we saw Congressional hearings at the state and federal level addressing crypto mining – and at least one of the witnesses made claims that were clearly inaccurate.

That led to today’s article, spearheaded by Cheyenne. The debate around crypto mining is clearly driving policy, and so it’s worth continuing to shed light on the reality on the ground.

On a personal note, this report marks the last major pieces published by Cheyenne and Doreen, both of whom have been a pleasure to work with and who will be missed. I’ll just say I’d like to thank them for their contributions and wish them well on their future journeys.

CoinDesk reporters Doreen Wang, Cheyenne Ligon and Nikhilesh De
CoinDesk reporters Doreen Wang, Cheyenne Ligon and Nikhilesh De

Stories you may have missed

This week

Monday

  • 18:30 UTC (2:30 p.m. EDT) There was a bankruptcy hearing for Core Scientific.

Wednesday

  • 07:00 UTC (9:00 a.m. CEST) Alexey Pertsev, the Tornado Cash developer arrested last year, will have another hearing in The Netherlands.

Thursday

  • 12:15 UTC (8:15 a.m. ET) SEC Chair Gary Gensler will speak at the Investment Company Institute.

Friday

  • Time TBD Daniel Shin, a co-founder of Terraform Labs, will go on trial.

  • 17:00 UTC (1:00 p.m. EDT) There will be a status hearing in the ongoing U.S. Department of Justice case against Ilya Lichtenstein and Heather Morgan (Razzlekhan). This hearing was originally set for November and has been kicked down the road a number of times.

Elsewhere:

  • (The Verge) Montana banned TikTok in the state – not just from government phones, but from anyone in the state using it. A trade association representing internet companies called it “unconstitutional.” TikTok sued Montana on Monday.

  • (San Francisco Chronicle) The El Niño weather event seems to be returning, meaning it’s going to get hot for a few years. Hotter than it’s been anyway.

  • (Protos) Tether, Circle and Paxos have all tapped lobbyists in recent years. Protos takes a look at how much they spent on lobbying between the end of 2021 and the start of 2023.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See ya’ll next week!