Why This Bitcoin Mining Company is Looking to Maine For Expansion

October 3, 2017

8:30 am

Bitcoin mining has become big business. It’s also an energy-intensive business, as mining companies set up large facilities full of racks of whirring computers solving the complex mathematical problems required to “mine” Bitcoin.

Because of this, locations with cool weather and access to cheap electricity are ideal for Bitcoin mining facilities (it’s also why Facebook built a data center near the Arctic Circle in Norway). So it shouldn’t come as a surprise that a major Bitcoin mining company has been eyeing Maine as a location for another of its mining facilities, according to a tweet by one of its executives.

In early September, Steve Schaeffer, president of MGT Crypto-Capital Strategies wrote on Twitter, that his company has been “investigating the hydro opportunities in Maine for a while now.” The tweet was in response to someone suggesting the company consider Maine for another mining operation.

MGT Crypto-Capital Strategies is a subsidiary of MGT Capital Investments, which bills itself as one of the largest U.S.-based Bitcoin miners. The company earlier this month claimed its current Bitcoin mining operations, which are located in Washington state, generate approximately $1.4 million in monthly revenue. One Bitcoin is now worth more than $4,000.

MGT would be considering Maine for a mining facility because of our cool weather and large amount of hydroelectric capacity. If the company built a mining facility in close proximity to a hydroelectric facility, it could source inexpensive electricity and improve its margins. Schaeffer didn’t reveal on Twitter where specifically the company had investigated in Maine, and a company spokesperson declined to elaborate.

“Due to the competitive nature of the industry, we are investigating other locations for mining operations, but nothing specific has been made public,” the spokesperson wrote in an email.

MGT may not be the only Bitcoin mining company interested in Maine, either. David Markley, cofounder of Surge Hydro in Belfast, said he’s had some “exploratory” conversations with interested parties, though wouldn’t reveal their identities. He did say, though, that those conversations weren’t with MGT.

Mining Bitcoin is an essential piece of how the crypto-currency works. Mining is the process by which new Bitcoins are released into the market, but it’s also how the Bitcoin transactions are processed, confirmed and added to the decentralized ledger, known as the blockchain. In order to mine Bitcoin, computers are required to solve complex mathematical puzzles. The first one to solve a puzzle, receives new Bitcoin in the form of a processing fee. That’s a very simple explanation.

Read about more companies expanding to Maine at TechCo

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Whit Richardson is a former daily newspaper journalist in Portland, Maine, who has covered business and entrepreneurship for the past decade. He's founder of Maine Startups Insider and currently editor-in-chief of 4Front Publishing, an online news startup covering the nascent legal cannabis industry.