Making Cryptocurrency: How Old Coal Mine Waste Powers a Pennsylvania Town Bitcoin Mine

NESQUEHONING, Pennsylvania (WPVI) — It could be part of the future of digital currency, it could be a new way to clean up the environment, or it could be both.

At the Panther Creek facility in Carbon County, Pennsylvania, the waste from old coal mines is being used to power a Bitcoin mine.

The facility is 2,800 miles away from Silicon Valley. Mark Zuckerberg or Jack Dorsey are not seen walking these streets.

And yet, the town of Nesquehoning, tucked away in a valley in Pennsylvania’s coal country, is home to America’s newest major Bitcoin mine.

“I didn’t know they had a Bitcoin mine. What is that? I mean, how do they mine Bitcoin?” said James Ehling of Jim Thorpe, Pa.

“My dad was a miner years ago. But as far as you call it, I’ve never heard of it that way,” said Debbie Tristani of Nesquehoning, Pa.

Publicly traded Stronghold Digital Mining bought the Panther Creek Energy Facility, a defunct coal plant in the city, to operate the Bitcoin mine.

Energy industry veteran Bill Spence says he came up with the idea to monetize digital currency while cleaning up his home country’s coal waste.

“I think I’m curious, painfully curious,” Spence said. Asked why it’s painful, he said, “it’s a never-ending process. It’s an itch you just can’t scratch.”

“There is a direct correlation in art with us, with Bitcoin and cleaning up the environment,” he continued.

Workers transport the coal waste from several sites, the largest being the Swoyersville Landfill near Wilkes-Barre. They separate usable coal from the massive piles and use it to generate electricity.

Some power is sold back to the grid for profit.

Most are used to power and cool a field of computer servers, all connected to the Blockchain to help process Bitcoin transactions worldwide.

Blockchain, an automated data ledger for Bitcoin, gives Stronghold fractions of Bitcoin as a “thank you” in return.

That is the digital mining.

There are 80 trailers on site, each containing 64 data servers, all of which have been mining Bitcoin in the two hours we’ve been here. During that time, Stronghold estimates that they have mined around 1 Bitcoin. In today’s prices, that means they earned more than $19,100.

“It’s not built for cosmetics, that’s for sure,” said Dave Buchinski of Stronghold Digital Mining

“It’s kind of like building the internet, right, when nobody knew what the internet was not that long ago. It’s definitely a little bit different, but it’s a more sustainable way of doing transactions, and so we’re building that infrastructure for that down the road,” Buchinski said.

Yes, this is not a zero carbon project.

Stronghold burns fossil fuels to power and air-condition these hot, buzzing, super-loud data servers.

But Spence points out that Pennsylvania has millions of tons of coal tailings piled up next to cities, polluting groundwater and sending ash toxins into the air.

And Spence, a cancer survivor herself, says someone has to get rid of it.

“These communities built America, they ran America, and this material was dumped in these communities. What we’re doing is we’re eradicating the problem,” Spence said.

Stronghold expects to clear the four million tons of coal waste at the Swoyersville site within a few years, potentially saving nearby residents from the ill health effects and paving the way for new development and open space.

Pennsylvania’s Department of Environmental Protection estimates it will cost taxpayers more than $5 billion to clean up all of the state’s abandoned mines. So it likes to subsidize companies like Stronghold that are willing to get rid of the piles

Now, if only the price of Bitcoin will return to the peaks of almost $70,000, only reached late last year.

Asked how much Bitcoin he owns, Buchinski said, “at this moment, enough to hopefully keep us happy for a while.”