New Mining Towns: How Bitcoin Is Luring People To East Washington
Bitcoin miners, who use a lot of computing power to run calculations to secure the cryptocurrency, and thus favor places with cheaper electricity, have recently gravitated to a number of rural counties east of Seattle to set up shop.
The miners came looking to buy or rent residential properties with garages or other detached structures, or unused commercial structures, in which to set up their operations.
The influx of cryptocurrency miners and mining activity has roiled the local real estate market, the Wall Street Journal reports, and raises the possibility that other places with cheap power might attract the attention of eager bitcoin miners.
Wenatchee, Washington, is about 150 miles from Seattle, and has some of the lowest electric costs in the nation, with its power provided by hydroelectric sources. Recently the town itself has been the focus of bitcoin miners, though many have located in the rural areas outside of town.
Power is important to bitcoin miners because a few hundred high-speed computer servers are needed for their pursuit, along with a robust cooling system to keep them from melting down. Trillions of calculations are necessary to mine bitcoin, and some mining operations use power on an industrial scale.
Demand for residential properties was already growing in Wenatchee, fueled by exiles from higher-cost markets and retirees. Add bitcoin miners to the mix, and residential prices have spiked by 11% since last year, as of February.
In the earlier days of bitcoin mining in this part of Washington, the best sites around the town, according to Politico, were not actually residential properties, but old fruit warehouses. Other commercial properties once occupied by tenants that used a lot of power, such as machine shops or car washes, also were scouted by bitcoin miners.
As more cryptocurrency miners and more sophisticated operations came to the area, the locations set up for mining around town proliferated. Now in three rural counties in the region — Chelan, Douglas and Grant — the landscape is dotted with various operations, including industrial-scale facilities and repurposed warehouses.
By the end of this year, miners in this part of Washington state might account for 15% to 30% of all bitcoin mining in the world, and large shares of other cryptocurrency mining, such as of Ethereum or Litecoin, Politico reports.
There has been backlash in Wenatchee. In February the Wenatchee City Council banned cryptocurrency mining in residential and mixed-use zones for a year. Last month, the local utility district imposed a moratorium on applications for cryptocurrency-related activities.