Blockware Solutions to build 150-megawatt Bitcoin mining facility in West Virginia

Blockware Solutions (BWS) announced Wednesday that it’s partnering with SEVA — a climate-focused company working to recreate mine lands and economies in West Virginia — to support its solar farm endeavor. The new mining facility will be powered by West Virginia’s PJM power grid as well as the new solar farm. Construction on the 150-megawatt Bitcoin mining facility is expected to begin in the fourth quarter of 2022.

The partnership with BWS is in support of SEVA’s multi-phase SunPark project, which is set to include industrial and commercial development, an educational experience, tourism and hospitality venues, and other features. 

The SunPark solar farm will be West Virginia’s largest at 3,000 acres. Both the solar farm and BWS’s mining facility are being built on the Hobet mining site, an abandoned coal mine in the Boone and Lincoln counties of West Virginia.

The construction on BWS’s Bitcoin mining facility will take place in phases, with the first phase being a 60-megawatt facility on a 20-acre site. The company has two other facilities in eastern Kentucky: a 20-megawatt mining facility and a 30-megawatt mining facility that’s currently under construction. According to the press release, the construction is expected to bring high-paying jobs to the area, with an average hourly wage of $23.

The environmental impact of Bitcoin mining

Bitcoin mining can be a divisive topic, with many people concerned about the environmental impact it can have. Because Bitcoin has a proof of work consensus mechanism, in order to create or mint a new Bitcoin, computers must solve mathematical equations of increasing complexity.

As the overall supply of Bitcoin decreases, the equations become more complex and therefore require more computational energy to solve. Competition among miners also increases the need for faster, more powerful machines. The first miner to solve an equation is awarded the cryptocurrency. Bitcoin’s maximum supply is capped at 21 million coins.

While proof of work is the most widely used consensus mechanism in crypto, it’s not the only one. Proof of stake is another consensus mechanism used to validate blockchain transactions and is more energy efficient. Ethereum, which was engineered as a proof of work consensus blockchain, is expected to adopt a proof of stake consensus sometime this year. However, it’s highly unlikely that Bitcoin will ever make the transition. 

According to the Columbia Climate School, Bitcoin mining consumes 121.36 terawatt hours per year, which is a higher energy consumption than some countries as well as more than Google and Apple combined.

In Cambridge University’s 3rd Global Cryptoasset Benchmarking Study, the university found that only 39% of Bitcoin mining operations utilize renewable energy. The energy consumption required to validate transactions on the blockchain results in carbon emissions, which in turn damages the climate. However, BWS’s Bitcoin mining operations are mostly powered by solar energy, which doesn’t harm the environment.

“The way that Blockware looks at this is, we’re responsible users of grid energy,” Warren Rogers, Blockware Solutions CFO, told ZDNet. “One of the benefits of being in West Virginia is that we pull from the PJM grid, which is a lot of the time overproduced but a very stable grid. If you look at the PJM grid, it has a lot of renewable components to it… so it’s well on its way to becoming a renewable standard.”

In addition to being clean-energy focused, Rogers said the company is interested in reducing waste from abandoned industrial towns. At all of BWS’s mining facilities, the company recycles and reuses previously abandoned industrial infrastructure. 

According to Rogers, one of the draws for BWS to construct in the Appalachian region of West Virginia is because it has a lot of coal mines and power infrastructure that can be reclaimed, renovated, and recycled. 

“At each of our sites — this would be our third — we’ve repurposed former infrastructure. We’ve renovated buildings, substations, and power lines,” he said. “By doing that, it keeps [material] out of the landfill, it keeps it out of the smelter, [and stops it from being] melted down for something else. It’s also making use of things that are already there and not disturbing the natural habitat. Some of these reclaimed mines are quite beautiful.” 

A new form of mining for West Virginia

In addition to reusing formerly abandoned industrial infrastructure in Boone and Lincoln county, the project is expected to bring many jobs to the area. Not only will there be construction jobs created, but permanent jobs as well: technicians, administrators, security workers, maintenance employees, and others.

“Ideally, we look at it like every 10 megawatts you need three to five employees there, and it just grows after that. One reason we like the asset there is that we can grow it in phases as well. But we’ve seen a great demand for jobs in the area, which is another reason why we’re thrilled to be there,” Rogers said.

The first phase of construction could take six months to complete, depending on construction hurdles and other factors.

“A lot of these areas have suffered disproportionately in the United States, simply because of the decline in coal,” he said. “And that could be viewed as right, wrong, or indifferent, but it doesn’t matter. They were jobs. And when jobs are lost, communities suffer and cultures suffer. So bringing in a new form of mining to the area does a lot… and these are, comparatively, safer jobs. So I think this is an exciting step.”