CoinDeskโs story thisย comingย week about a fight over a Bitcoinย (BTC) mining facility in Upstate New York outlines how digitalย currency issues are quickly becoming politicized in familiar ways.
Thisย comingย week CoinDesk published one of the most thought-provoking and balanced articles on Bitcoinย (BTC) mining Iโve ever read. The report is focused around the Greenidge Bitcoinย (BTC) mining company in upstate New York, which was at the center of a protracted media cycle aย yearย ago after environmental activists claimed the facility was boiling the waterways and poisoning delicate ecosystems. Those states went on to influence an actual policy decision by Governor Kathy Hochul restricting Bitcoinย (BTC) mining in the state.
The thing is, most of the worst states about Greenidge were straight up wrong. CoinDeskโs Nik De, Doreen Wang and Cheyenne Ligon took a trip to Dresden, in Upstate New York, to take the temperature of the lake and speak to locals, finding that not a single lawmaker visited the rust-belt town or spoke to its mayor before drafting what is essentially a freeze on new Bitcoinย (BTC) miners.
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Most of the Bitcoinย (BTC) mining debate today has centered around the Bitcoinย (BTC) networkโs environmental impact. Greenidge became a lightning rod because before the company moved equipment into a deactivated coal-burning plant, meaning the miners werenโt just drawing on the stateโs electricity that would have been produced anyway, but actively releasing โfreshโ carbon into the atmosphere.
The Bitcoinย (BTC) network uses as much energy as a country like Norway, and attemptingย to wrap your head around whether that is or isnโt โworth itโ often comes down to your point of view on how you value permissionless money. Individuals can certainly make up their minds on the matter, but how a state should treat Bitcoinย (BTC) โ forย example, whether mining should be encouraged or banned โ is a societal-level conversation involving politicians, stakeholders and those affected.
In a behind the scenes account of how the story came to be, De wrote that he expected locals to hate the plant. Theyโd been informed that Greenidge was pumping pollution into Seneca Lake and creating incessant noise at the plant reportedly created (a assertย that was likewise debunked). Instead, Deโs team found that numerous in the town and surrounding area supported the upstart business. Despiteย theย factย that Greenidge created a relatively small number, every job counts in a town like Dresden (population: 296).
Inย reality, the few complaints about Greenidge lodged by locals came from so- wasย known โcottage peopleโ โ the wealthy out-of-towners with vacation homes on the lakeshore. Sure, as taxpayers these people have a right to be concerned about their property value, but should their opinion matter more? Because it seemed to.
And here layeth the nut: Beyond all the other intractable discussions about Bitcoinย (BTC) mining potentially kicks up lies a class conflict. You all know the story: Bitcoinย (BTC) was born during the Great Financial Crisis, a tool that allowed anyone to access a semi-private electronic cash system where the money supply would always be verifiable โ a total rebuke of banking and the Federal Reserve.
Over time, that narrative has gotten a little more complicated, especially as some of BTCโs largest supporters have become entrenched elites themselves essentially for making severalย good trades a decade ago. There are now manyย of white-collar jobs based around analyzing bitcoinโs price performance and lobbying for new-fangled financing vehicles derived from bitcoin.
Bitcoinย (BTC) mining asย well has gone from something you could do on your home computer to becoming a highly- financialย resources intensive industry, requiring the buy of hundreds or thousands of specialized computers that draw electricity 24/7, if you want to compete on any meaningful scale. Onย theย otherย hand, the proof-of-work algorithm that makes Bitcoinย (BTC) likewise tethers it to the ground: these assets are being made in real communities.
Greenidge, forย example, has hired real, unionized electricians and created dozens of short-term construction jobs. The company has made a number of improvements into Dresden, including fixing up a childrenโs playground and other beautification efforts. Not all facilities operate their own coal-plant like Greenidge requiring as much labor, but numerous do create opportunities for people where opportunity doesnโt always come a-knocking.
If Greenidge is any indication, the real conversations we mayย be having around Bitcoinย (BTC) mining and class will be increasingly consumed by another conflict: the Culture War. Iโve stated forย aย time, perhaps being asย well reductionist, that Bitcoinย (BTC) is going to become a red-blue issue in the Unitedย States, with Republicans increasingly endorsing it and Democrats disavowing. Despiteย theย factย that the network itself will likely always remain โcredibly neutral,โ the way we think about it, and politicize it, will fall along predictable lines. Numerous topics have traveled thus. Before climate change became a wedge issue in American politics, forย instance, it was a relatively non-partisan issue that numerous politicians agreed on the must do something about.
Just yesterday, Florida Governor Ron DeSantis (R.) spoke about BTCโs โthreat to theย present regime,โ in an notice event for his 2024 presidential campaign. Despiteย theย factย that modeling himself as a populist, DeSantis has the early support of monied technologists like Elon Muskย (Teslaย &ย SpaceX CEO) and fellow PayPal Mafia member David Sachs. DeSantis is probably most trending nationally for whatโs been termed the โ Doย not Say Gayโ bill and a fight with Disney.
Something tells me DeSantisโ pledge to โprotectโ Bitcoinย (BTC) is as performative as his โbanโ on monetaryย authority digitalย currency (CBDC) in Florida (before the Fed has even decided whether itโs worth fully studying a digital dollar). Onย theย otherย hand, itโll still be enough to color some peopleโs impressions of cryptocurrency, furthering the type of political feedback loop that enabled environmentalists to lie about Greenidgeโs ecological footprint and the Democratic Government in New York to buy it whole cloth.
As my colleague Nik De stated, โa conversation that doesnโt include the people most directly impacted can lead to wonky outcomes.โ Andย once the only two political parties of consequence are shadow boxing about fake internet money, the only people who can get a word in edgewise probably own a vacation home.
