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WIRED
23-05-2025
- Business
- WIRED
Kentucky's Bitcoin Boom Has Gone Bust
May 23, 2025 7:00 AM In the US state's coal country, crypto mining was supposed to bring renewal. Now mines are powering down, and investors are hoping AI-powered data centers will fill the void. Photo-Illustration:If you drive outside the city of Campton, population less than 400, the low industrial noise of crypto mining rises from the trees. Step closer, and the source comes into view: squat metal buildings that look like shipping containers arrayed in a semicircle, thrumming with fans and processors. There's chain-link fencing, security cameras, and two guards sitting in pickup trucks just beyond the wire. There are steel shipping containers like this all over these hills, right where the old coal mines once stood. And inside, specialized computers race to solve complex math problems—competing to verify bitcoin transactions and earn slivers of digital currency as a reward. For a brief moment, in 2021, it felt like the region had found its next boom—and it had Bitcoin written all over it. At its peak, Kentucky accounted for some 20 percent of the collective computing power dedicated to proof-of-work cryptocurrency mining in the US. But booms, here, have a history. And so do busts. Local officials say it is hard to pin down the exact number of crypto mines still active in eastern Kentucky because state regulations are light and there's a general lack of transparency in the industry. But what is clear, locals say, is that the boom has begun to recede. ' They'd constructed on someone else's land, or they would be paying a host company to provide the physical plant,' alleges Anna Whites, a lawyer who represented a roster of crypto mining clients. 'So they'd pay the down payment or they would convince the landowner to pay the down payment, and then they would mine the first three months and then they'd go into the next billing set cycle, go almost to the end of it and then disappear.' In early 2022, when Mohawk Energy initiated a crypto mining project in Jenkins, Kentucky, local officials said this time it would be different. Cofounded by Kentucky senator Brandon Smith, Mohawk purchased a sprawling 41,000-square-foot building and the 8 acres around it. It leased most of it to a Chinese crypto mining company, and the rest of the building included classrooms and hands-on training centers that were supposed to teach locals how to repair iPads, maintain Bitcoin rigs, and build skills for a digital economy. It was a big deal for Jenkins. A local PBS station ran a story about the launch. The images showed tool kits, workers, and smiling officials. 'The plan with Mohawk was to employ retired coal miners and disabled veterans who were back in eastern Kentucky and couldn't find work, and train them,' said Whites, who counts Mohawk as one of her clients. Among other things, the project promised near-six-figure salaries and a vow to put some of the mining proceeds into the training program, to help grow it. And for a time, it worked. Whites said that for a brief moment—about 18 months—things looked promising. Twenty-eight families saw real gains: One person from each family landed a permanent job, and about 30 more relatives found work nearby. But when we asked where things stood now, she paused. 'I believe most of them are unemployed again.' The unraveling came quickly. The Chinese partner sued for breach of contract. Mohawk counter-sued. And the shared crypto profits never materialized. Now, as some Kentucky residents have soured on bitcoin mining, they've started to speak about AI data centers in the same way they used to talk about coal seams and hash rates: with a kind of cautious hope. AI, they say, could bring jobs, fiber optics, and permanence. Colby Kirk runs a nonprofit called One East Kentucky, focused on bringing economic development to the region. He remembers the moment the conversation shifted, back in April when he was in Paducah for the Kentucky Association for Economic Development's spring conference. 'They had some site selection consultants that were on the panel, and they were talking about data centers,' he recalls. 'And they talked about this I-81 corridor up through Pennsylvania where there's all kinds of these big data centers. And they talked about whether our communities could prepare for some of these kinds of investments? And the consultant was like, here's kind of what it takes.' What it takes, it turns out, is no small feat: flat land, lots of power, fiber connectivity, and a workforce that can wire and weld. As fate would have it, the number of welders in the area, according to regional economic development organization One East Kentucky, is about twice the national average, which stands to reason, because wherever there's metal and stress—and there's a lot of both in coal mines—welders are the people who keep it all from falling apart. The old infrastructure is still there too; substations, hardened ground, cooling systems, and power-hungry hardware just waiting to be switched back on. 'Maybe a data center or something is a part of the puzzle,' Kirk said. So, at the conference, when the panel ended and the floor opened to questions, Kirk says he asked the one he couldn't stop thinking about. 'You know, 50, 60 years ago it would take a room bigger than my office to power a computer, and now I've got a computer I carry around in my pocket that's more advanced than what we sent astronauts to the moon with,' he recalls asking. 'Are these data centers going to keep taking up million-square-feet buildings with 30- and 40-foot ceilings, or are we gonna be left with an abundance of warehouse or industrial-scale buildings that we won't be able to keep up?' The consultant, he claims, didn't have a good answer. 'And that's the thing,' Kirk says. 'We don't know what the future's going to hold when it comes to this stuff.' That kind of ambiguity doesn't sit well with Nina McCoy. She's a former high school biology teacher from Inez, a coal town made famous in 1964 when President Lyndon Johnson used it to generate support for his War on Poverty. 'This is going to sound awful,' she says, 'but if they're putting it here, then that means it's bad. We've lived here long enough to see that that is how it works. You put those things that you don't want in your neighborhood in a place like this.' Her skepticism is rooted in lived experience: In October 2000, a massive coal slurry spill from a mine site upstream poisoned the Coldwater Fork stream, which runs behind her house. People in Inez couldn't drink water from the tap for months. 'Those of us living downstream didn't hear about it for a while, but the school system had to close down for about a week until they got an alternate water source,' she says. To this day, many in Inez still don't trust the tap water. So when McCoy hears the hype about AI, she hears something else: another promise that comes with a cost. 'We've allowed these people to be called job creators,' she said. 'And I don't care if it's AI or crypto or whatever, we bow down to them and let them tell us what they are going to do to our community because they are job creators. They're not job creators, they're profit makers.' And the profit leaves a footprint. AI data centers demand staggering amounts of energy—a ChatGPT search uses up to 10 times more energy than a regular Google one—and they run hot. To keep them cool, these facilities consume billions of gallons of water every year. Most of that evaporates, but residents are wary because they have had problems with facilities and their runoff in the past, so they worry these new facilities could affect fish and disrupt the land. The very things the residents of Kentucky hope to preserve. Still, some locals see potential, even progress. 'AI is in everything that we do,' said Wes Hamilton, a local entrepreneur who did his fair share of crypto mining in Kentucky in its heyday. 'Siri, ChatGPT, robotics—everything you can imagine has to have AI,' he said. 'Bitcoin is a one-trick pony. You create it. The only person that gets paid is the owner of the machines.' Hamilton claims there is a path forward where data centers bring in investors, engineers, maybe even companies willing to stay. All the AI people in the world would be steaming into Kentucky, Hamilton says. And while he admits to losing a fortune in crypto ventures in the past, he claims this is different. When Bitcoin first arrived, lawmakers offered generous tax breaks to lure miners. Companies investing more than $1 million were exempted from paying sales taxes on hardware and electricity. And then, in March 2025, Kentucky governor Andy Beshear took all that and went a step further by signing a 'Bitcoin Rights' bill into law. The legislation, cast as a defense of personal financial freedom, is designed to enshrine the right to use digital assets in Kentucky. An earlier draft went further, aiming to bar local governments from using zoning laws to restrict crypto mining operations—a provision that drew resistance from environmental groups. That language was eventually tempered, but the intent remains: to signal that, in Kentucky, digital extraction can keep humming. Which is why we found ourselves outside this facility in Campton, staring at this semicircle of metal buildings nestled in the trees. The mines run all night and all day, even Sundays. And the question some are asking now, with bitcoin hovering around $100,000 and big miners talking about pivoting to AI, is whether bitcoin mining gets a second wind in Kentucky. Mohawk's bitcoin mining may even make a comeback. Anna Whites said the parties are supposed to go into arbitration May 12th. 'I'm hopeful,' she told us. 'I'm very hopeful that they sit down and say, 'Mighty nice plant you have there. Let's just go ahead and turn it on.''
CBC
21-05-2025
- Business
- CBC
Head of the Yukon Chamber of Mines says moving projects forward is challenging
Mining in the territory has had major setbacks in the past couple of years. First was the abandonment of the Minto Mine. Then there was the catastrophic heap leach failure at the Eagle Mine.
Forbes
09-05-2025
- Business
- Forbes
AI Unearths New Potential In The Mining Industry
AI in mining Mining might not be something you think about daily, but every physical product we use and depend on is dependent on natural resources that come from and are extracting from the Earth. AI is increasingly being utilized in the mining industry to improve efficiency, safety, and sustainability. So let's dig into it. Mining operations are performed in unforgiving and hazardous environments. AI systems are helping to improve overall efficiency and safety by removing the human from the most dangerous environments and augmenting human capabilities. There is increasing use of AI to power autonomous trucks, drills, and loaders used in mining operations. These AI-driven vehicles can operate in hazardous environments with precision, improving safety and productivity. Companies have developed autonomous mining vehicles that are already being used in large-scale mining operations. When equipment operates in challenging environments, they need continuous maintenance. However, maintenance takes critical equipment offline and consumes resources. Being more precise with maintenance means increased uptime for expensive and necessary equipment and significant cost savings. AI-driven predictive maintenance systems monitor the health of mining equipment by analyzing sensor data to predict when machinery might fail, improving equipment reliability and lifespan. There are many processes involved in extracting resources from the ground and making them usable and accessible for their applications. The more that these processes can be made more efficient, safer, less environmentally impactful, and more reliable, the more that those benefits will be passed upstream to those who consume those resources. AI is used to optimize various mining processes, such as crushing, grinding, and flotation, by analyzing real-time data and adjusting parameters to maximize efficiency. AI-driven process control systems improve throughput, reduce energy consumption, and enhance overall operational efficiency. AI systems are also helping to plan mining operations and estimate resources as part of mining processes. AI improves resource estimation by analyzing geological data to provide more accurate assessments of available resources. This enables better mine planning and more efficient extraction of minerals. AI-driven mine planning tools help optimize the layout of mines, reducing waste and maximizing resource recovery. AI-driven mine planning tools help optimize the layout of mines, reducing waste and maximizing the overall resource recovery. AI systems are also being used as part of ore grade prediction and exploration. These systems analyze geological and sensor data to predict the location and quality of ore deposits, using patterns in seismic data, drill hole information, and satellite imagery to overall improve the accuracy of mineral exploration and reduce the time and cost involved in finding new resources. As mining environments are not the most friendly for human activity, AI systems can be put to good use keeping mines safe and well operated. AI is increasingly used to help with overall safety monitoring and incident prevention by analyzing data from sensors, cameras, and wearable devices, helping predict and detect potential hazards, such as rock falls or gas leaks, or equipment failures. The AI systems can alert workers and supervisors so that they can take preventative actions, reducing the risk of incidents and energy and injuries Mining operations are also very energy intense. AI systems help optimize energy consumption in mining operations by analyzing usage patterns and identifying opportunities to reduce energy waste. These energy management systems can optimize power usage across different processes, lowering operational costs and reducing the environmental impact of mining activities. The range of environmental impacts of mining operations include air and water quality, water usage, waste management, managing mine outputs, impacts on underground and above-ground land and environment, and human and animal impacts. Mining operations must comply with a range of regulations and compliance activities to both keep their operations safe and minimize those environmental impacts. AI can monitor environmental factors such as air quality, water usage, and waste management to ensure compliance with environmental regulations. AI-driven systems can detect deviations from permitted levels and recommend corrective actions, helping mining companies minimize their environmental footprint and avoid fines. Mines generate not only useful outputs but also other side-effects of extraction such as waste water and materials that need to be managed such that they don't in themselves cause problems. Called tailings or tails, these are the materials left over after the process of separating the valuable parts of the extraction from the other parts. These tailings are often stored and managed in order to be reliably and responsibly disposed of. AI enhances tailings management by monitoring the stability of tailings dams and predicting potential failures. AI-driven systems analyze data from sensors embedded in the dams, such as pressure and moisture levels, to detect early warning signs of dam breaches. This helps prevent catastrophic failures and environmental disasters. While mining operations are just started with applying AI to all these areas, we can foresee a future where not only we get access to the much-needed resources that power and support our daily lives, but also continue to do so in a safe, efficient, and effective way.
