Bitcoin Miners Descend on Rural Washington - Wall Street Journal
Inside Bitcoin Asic Hosting, which has roughly 350 cryptocurrency-mining machines at its headquarters in East Wenatchee, Wash. Photo: Sofia Jaramillo for The Wall Street Journal
In Wenatchee, Wash., a bitcoin invasion is under way.
Home to hydroelectric dams that harness the flow of the Columbia River, north central Washington has some of the cheapest power in the U.S.
That has made the largely rural area best known for its apple orchards a magnet for bitcoin miners, who use powerful specialized computers to generate new units of cryptocurrencies—a process that requires vast amounts of electricity to run and cool thousands of machines.
“If you ask the guys at UPS or FedEx what they’re delivering to Wenatchee, I think they’d tell you it’s a whole bunch of bitcoin mining machines,” said Frank Kuntz, mayor of Wenatchee, which has a population of nearly 34,000.
If all the cryptocurrency mining operations in the works go forward, power demand could double in some areas and require expensive new infrastructure. That has become a dilemma for utilities that are figuring out how to deal with the deluge of requests without bearing the brunt of wild swings in cryptocurrency prices.
“We’re getting requests for service that are just astounding,” said Steve Wright, general manager of the Chelan County Public Utility District, which includes Wenatchee. “We do not intend to carry the risk of bitcoin prices on our system.”
A view of Rock Island dam on the Columbia River near Wenatchee, Wash. The dam generates hydroelectric power.
Sofia Jaramillo for The Wall Street Journal
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Four of the mining inquiries that Chelan County’s utility has received since October are for 100 megawatts each—that is enough power for more than 50 hospitals, and building the infrastructure for each mine could cost more than $40 million.
Mining operations can squeeze into small spaces. Shoebox-size computer servers that suck up as much power as roughly 1,000 homes can be packed into a 25-by-25-foot room. Miners have popped up in unexpected places in the area: an old laundromat, a former fruit-packing warehouse, apartments, and even free-standing cargo containers.