When it begins operations in August, Fayetteville’s new crypto mining facility is expected to be one of the top 10 power users in the city.
California-based Plan C Crypto plans to operate an old, 20,000-square foot industrial facility near the Fayetteville regional airport. According to the company, it will be able to generate 5,000 kilowatts.
PWC does not release information about power consumption on businesses without consent. However, the facility’s electrical draw will place it in the company PWCs top clients, including Cape Fear Valley Medical Center and Fayetteville State Universities, Fayetteville Technical College College, and Walmart, among others.
Many critics consider the industry’s high carbon emissions wasteful. They contribute to climate change as well as rising global temperatures.
Lee ReinersA Duke University researcher who studies financial technologies like cryptocurrency is one of those who are critical of a business plan that he doesn’t see any legitimate financial benefit in the future.
He stated that cryptocurrency does not provide any useful economic function. Anything that is an input to this process is not valuable. It is wasteful. That’s my opinion on crypto. There isn’t one.
Why is crypto so power hungry?
Instead of operating through financial institutions which verify monetary transactions, cryptocurrencies like Ethereum or Bitcoin operate outside this structure.
The proof of work process is used to verify cryptocurrency transactions. Multiple entities on a network verify withdrawals and deposits in crypto space. This eliminates the need for a central bank.
This verification process is called mining. Once the majority of computers on a network have confirmed the transactions are valid, the ledger is updated to a public ledger, known as the blockchain.
Reiners stated that everyone has the exact same copy of the ledger and everyone agrees on its canonical status. That’s possible because of mining.
Reiners stated that mining is incentivized. Miners such as the one in Fayetteville are given a certain amount bitcoin or any other cryptocurrency in return for participating in the verification process.
You must incentivize mining, because otherwise, anyone with 51% computational power on the blockchain network can just make up whatever they want on the ledger.
So, you impose costs and you impose those costs in the form of energy use. This complex mathematical puzzle is what you need to solve.
This puzzle requires a lot of energy.
According to The New York Times, the annual energy consumption of the collective process for verifying Bitcoin transactions is greater than that of any other activity. Finland as a whole.
It’s seven times higher than all of Googles global operations.
All this has an opportunity cost
Plan C Crypto CEO Antonio BestardHe stated that he created the company to provide more clean energy for the power grid. He stated that his company would offer Fayetteville an incentive to purchase more carbon neutral energy.
He stated that I am creating an economic demand for more green energy. We found an economic solution to help Fayetteville and help them green their grid over the long-term.
Bestard was unable to answer questions about the process beyond asking Fayetteville for more green energy.
Bestard stated that we look forward to working together with Fayetteville on how they obtain power. He stated that he had asked the city for 100% clean energy to run the mine facility.
Fayetteville is not the only place that will benefit. Bestard indicated that by the time the miner will be up and running, there will be facilities in Tarboro and Wilson.
Fayetteville and other municipalities cannot promise green energy.
PWC says that almost all of the city’s power comes from Duke Energy, which has a monopoly in North Carolina’s power grid.
Duke Energy has set a goal for a 50% reduction in carbon emissions by 2030. Net-zero by 2050The company has a long way yet to go.
Duke Energy produced 7% of its electricity in 2020 as wind, solar, or hydroelectric. The company projects that this number will reach 23% by 2030.
The majority of nuclear energy is also carbon-free. 35% of electricity generation2020
This puts carbon-emitting power at just 60%
Reiners claimed that the claim that crypto encourages green production lacks foundation.
He said that he heard this argument a lot. Oh, cryptocurrency incentivizes green energy production. That claim can’t be supported by fact.
Reiners suggested that green energy could be used to support legitimate economic purposes, even if Plan C Cryptos facility were carbon-neutral.
He also said that all of this has an opportunity cost.
Fayetteville has more revenue than any investment
Bestard stated that Plan C Cryptos facility will be one of the top power users in Fayetteville. However, the miner won’t run during peak demand hours. This is when energy consumption is at its highest.
Fayetteville PWC CEO Elaina BalIt was stated that no additional infrastructure would be required to accommodate the mining facility. It won’t need any peaker or large power generating plants that use lower energy, such as coal or natural gas, during peak hours.
Ball stated that Plan C Crypto would generate needed revenue due the high power it will purchase.
She said that by adding a 5-megawatt consumer such as this, our retail sales will go up.
We’ll have higher usage 24/7, outside that peak window. It helps offset the cost of residential customers by generating more revenue from our system.
Robert Van GeonsFayetteville-Cumberland County Economic Development Corp. CEO, or FCEDC said that, despite some criticisms of crypto industry, the new facility would be good for the area.
It creates jobs. It is a tax-free investment that benefits our utility system. He stated that regardless of your feelings about cryptocurrency, it is an emerging technology and will continue to evolve. We will continue to see newer and more innovative technological innovations in the country, and we want them to happen here in Fayetteville or Cumberland County.
Bestard stated that the facility will initially employ 19 people and target military veterans. These jobs will be in the fields of information technology, security, and electrical.
He stated that the lowest-paid employees will earn $40,500 per year, while the majority of the workforce will earn between $60,000 and $100,000.
Bestard said that he anticipates many more jobs over the next few years.
Van Geons stated there were no economic incentives for Plan C Crypto and no financial investment from either county or city.
Ball stated that, besides the usual costs of attaching a customer to the power grid, there won’t be any significant costs for PWC.
The uncertain future for crypto
In a Press releaseThe FCEDC introduced Plan C Crypto to Cumberland and cited market statistics that projected cryptocurrency to grow by more than 100% by 2028.
Reiners, however, stated that the expected growth is speculative.
He stated that the only reason people buy cryptocurrency is to think they can sell it later for a higher value.
It has been around for quite some time. It’s been in existence since 2009. It has been since 2009. It has had an impact on a product, service, or process that we all use. It hasn’t. You should ask yourself when it will happen.
He described the industry in a bubble based only on the speculative price someone is willing to pay for something that hasn’t proven its worth.
Reiners said that you can’t rely on bigger fools showing up. But eventually, there will be no more. They don’t show up.
He said that Fayetteville should not encourage crypto companies to come to its area.
Reiners stated that crypto is a cancer. You are making a deal to the devil.
He cited Crypto miners buy cheap carbon-based powerAs reported by The New York Times: Upstate New York
Reiners said that he wouldn’t surprise if the Fayetteville facility didn’t exist in five years.
Ball stated that even if the company fails it is not a risk to the community.
She said that if I was to build a power plant to support it, that would be a huge danger. However, they are not increasing their capacity.
They don’t increase the demand. This is not a sales operation. Because they can move out the demand window, we are not installing a power plant to support it.
I understand that people from other communities have different perspectives and are welcome to share theirs. But I am committed to what is best for our customers and our community. This is good.