10/21/2024

In the Kentucky Mountains, a Bitcoin Mining Dream Turned into a Nightmare

Small industrial facilities' partnerships with Chinese companies are dying

On a dead-end road that climbs out of the tiny city of Jenkins, in the foothills of the Appalachian Mountains in Eastern Kentucky, there stands a large warehouse with a mint green roof. It shares the road with a few other businesses, but is otherwise surrounded by an expanse of open fields and tree-lined slopes. Inside, the warehouse is stacked high with racks on racks of computers—thousands of them. But none have ever been switched on.

The warehouse is owned by Mohawk Energy, a company cofounded by Kentucky state senator Brandon Smith in 2005, originally to resculpt landscapes disfigured by coal mining. After lying dormant for a period, Mohawk was reincarnated in 2022 when Smith struck a deal with HBTPower, a company then owned by Chinese crypto exchange Huobi, which wanted to use the warehouse for a bitcoin mining operation.

Under the deal, Mohawk promised to fit up its warehouse with the necessary power infrastructure, operate the equipment, and funnel any bitcoin produced to HBT. In return, HBT would pay Mohawk a monthly hosting fee, a cut of its mining revenue, and the associated energy bills.

Please select this link to read the complete article from WIRED.