Cryptocurrency Miners Make Big Promises In Small Towns Massena, N.Y., has hemorrhaged factory jobs over the past decade. Now, digital currency mining firms have come to town, promising jobs and investment.
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Cryptocurrency Miners Make Big Promises In Small Towns

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Cryptocurrency Miners Make Big Promises In Small Towns

Cryptocurrency Miners Make Big Promises In Small Towns

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  • <iframe src="https://www.npr.org/player/embed/609790069/614935639" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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RACHEL MARTIN, HOST:

Like many American manufacturing towns, Massena, N.Y., has hemorrhaged jobs in the past decade. GM and Reynolds Metal closed. Aluminum company Alcoa downsized. But now Massena is banking on a new opportunity to boost its economy - cryptocurrency. North Country Public Radio's David Sommerstein explains.

DAVID SOMMERSTEIN, BYLINE: Massena is the archetype of the company town that lost its companies. Main Street is a mix of stately old buildings and empty union hall, a couple banks and restaurants and a bunch of vacant storefronts. So back in January, Town Supervisor Steven O'Shaughnessy was over the moon when all of a sudden, companies that do something called bitcoin mining were knocking on Massena's door. The town has something they really need.

STEVEN O'SHAUGHNESSY: They need lots of power. They need to be able to count on it. And we can provide that.

SOMMERSTEIN: Massena has some of the cheapest electricity in the Northeast. It comes from a hydropower dam nearby on the St. Lawrence River. A quick primer on bitcoin mining - bitcoin is the best-known of the digital or cryptocurrencies, which operate completely independently of banks. Instead, they rely on powerful computers around the world to verify every transaction that uses a digital coin. People operating those computers earn new coins for doing that verification work. That's called mining. So now companies want to set up huge warehouses full of computers to mine digital currency. The thing is, all this mining gobbles up vast amounts of electricity, and that's why a Hong Kong-based company called Digital Skynet Limited came to Massena and set up hundreds of computers in an old factory.

TINA BARKSDALE: Yeah, these are the miners, and as you can hear, they make a lot of noise.

SOMMERSTEIN: Tina Barksdale says Digital Skynet employs 20 people here now, but she imagines something much bigger - way more computers, but also, an innovative hub for the cryptocurrency technology, generating hundreds of jobs - the transformation for the town of Massena.

BARKSDALE: From being just Massena, N.Y., to being a cryptocurrency sort of Silicon Valley. But, of course, it all depends on the power.

SOMMERSTEIN: When the value of a traded bitcoin soared to almost $20,000 late last year, a bitcoin-mining rush hit lots of places with cheap power. But it only takes so many employees to keep an eye on a bunch of computers, and in some places, the power-hungry miners started driving up electric rates for everybody else. Near Massena, the city of Plattsburgh, N.Y., put a moratorium on new mines because of rising electric bills. And so local leaders, like State Senator Joe Griffo, began to ask, will bitcoin mining really create enough jobs to justify using all that electricity? And will those jobs last?

JOE GRIFFO: I would not dismiss it out of hand, but I think you also have to look at things realistically. Where is bitcoin going to go over time?

SOMMERSTEIN: Bitcoin's value has been all over the place. It steadily dropped most of this year. So the big question is, if the price keeps dropping, will miners stick around? Lex Sokolin of Autonomous Research in London studies digital currencies, and he believes they have a promising future, but he thinks it's inevitable developers will come up with a more energy-efficient way to mine them.

LEX SOKOLIN: It just seems somewhat preposterous to me because the amount of electricity that's being used is growing, and growing and growing, and I think the community will try to find a different way to do this.

SOMMERSTEIN: Towns like Massena would lose their advantage. Digital Skynet's Tina Barksdale says that's why Massena should embrace bitcoin mining now to establish its position in an emerging digital currency economy. For NPR News, I'm David Sommerstein in Massena, N.Y.

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