In Pacific NW, an 'Intensifying Guerilla Warfare' Over Bitcoin

You'd think any old region would do for a bitcoin mining business: Just set up a computer, solve a bunch of sophisticated math puzzles, and start raking in that sweet virtual currency. But as Paul Roberts' deep dive on Politico notes, that kind of computer power can require "an inordinate amount of electricity," and the Mid-Columbia Basin area along the Columbia River in Washington state is uniquely positioned to provide that kind of juice, thanks to five hydroelectric dams. Not to mention it boasts ample space for the tens of thousands of servers that can be found on single sites spitting out mining calculations, as well as for the systems needed to keep those servers cool enough to function. With the recent spike in bitcoin pricing—Roberts notes a single coin's value rose in 2017 from $1,000 to $19,000—there are now makeshift mining facilities scattered across the area to capitalize on the boom, set up in everything from revamped warehouses and industrial sites to backyard sheds.

However, the basin area, which some predict will host 15% to 30% of all bitcoin mining worldwide by the end of 2018, isn't without its share of boomtown "tensions." That includes lawsuits, bankruptcies, and even "an intensifying guerilla warfare" between local utility teams and the "shadowy army of bootleg miners" who drain the area's electrical grids dry. Roberts talks with some of the basin's top miners, including David Carlson, who Roberts deems "the face of the Mid-Columbia Basin crypto boom." Carlson had some early failures, but he soon realized finding a cheap place to mine in the US, as others had done in China, Iceland, and Venezuela, was the key to success. He's now settled in for the long haul in the basin, but others aren't so sure they can take the volatility anymore. "The risk and reward is getting pretty great," says prospector Lauren Miehe. "And I'm not sure I want to be on the front line of that battle." More on how this stretch of land became the US bitcoin-mining capital here. (More Longform stories.)