This April 3, 2013, file photo shows Bitcoin tokens. Bitcoin is a leading cryptocurrency.
Cryptocurrency has crept into Western New York almost unnoticed. Digihost’s bid to buy North Tonawanda’s nearly defunct Fortistar, a methane- and oil-fueled power plant, presents an imminent threat to our carbon footprint.
In Buffalo on Delevan Avenue, in 70,000 square feet of the old Chevy axel plant, Vancouver-based Digihost mines tons of Bitcoins.
To quote one of Digihost’s internet blurbs, “Today, the company owns 11,800 miners with more being added all the time. We possess a total power capacity of 42 megawatts. This makes us among the largest miners in the business. We actually mine Bitcoin and other cryptocurrencies in one extremely low cost and low power consumption data center in Buffalo, NY.”
Bitcoin mining is an accounting system for Bitcoin transactions. Banks perform this function for conventional currency using time-honored accounting practices. Bitcoin-mining computers devise formulas that compile transactions into blocks of hashed information. Each new block is based on the previous one and the whole forms a chain. Miners compete to produce these formulas. Every 10 minutes a winner is awarded 6.25 Bitcoins. As of Friday, each Bitcoin was worth just over $50,000.
The complexity of the computation required, and the growing number of miners, requires amazing quantities of electricity. The world Bitcoin industry is estimated to be using as much energy as Argentina, twice that of Switzerland.