Vancouver, BC-based Solar Alliance Energy Inc. plans to establish the world’s first solar-powered crypto mining complex in Murphysboro, according to a June 13 official announcement.
Under a new, public-private initiative known as “Renewing the Murphysboro Community Through Green Energy Jobs,” the Canadian alternative energy company plans to redevelop the town’s abandoned Curwood Building into 165,000 square feet of specialized office condos for the mining of digital currency such as Bitcoins.
Cryptomining involves the use of complex computer functions to effectively create Bitcoins or other forms of cryptocurrency, which are increasingly used for online commerce transactions.
Technically, the process involves the duplication, and then use, of sophisticated computer algorithms to track cryptocurrency transactions – for which technology enthusiasts are effectively paid a commission in the form of newly created cybercurrency.
In addition to custom-tailored office space, the facility will offer its techie tenants inexpensive electricity for the highly power-intensive process.
Power will eventually be supplied by a massive, 500 kW custom-designed solar panel array and battery storage facility on-site, the company says. Electricity will initially be supplied through the Murphysboro-area power grid, which has lower rates than many electric companies around the nation.
However, critics warn the entire project could be undermined by an oft-predicted cryptocurrency market collapse.
They also note that power demands at other crypto mining complexes have led to electric shortages and rate hike — spurring concern that, even with the planned solar array, similar problems be experienced in the Murphysboro area.
The Curwood Plant, N. 19th St., was once used by the Bemis Corporation of Oshkosh, WI, to manufacture flexible paper, foil and plastic packaging. The plant closed in 2004, idling 100 workers.
In 2015, Murphysboro and Bemis entered into an agreement to jointly market the 14-acre plant site in the middle of town.
Then-newly-elected Mayor Mayor Will Stephens sent packages on the site — complete with video presentations and glass apple novelties — to 350 warehouse and manufacturing companies, selected from Inc. Magazine’s annual list of the nation’s 5,000 fastest growing companies.
In May 2016, Stephens told an area newspaper that a handful of companies had expressed in the site. City officials indicated last week they had been in negotiations with Solar Alliance for four years.
In September of that year, Jason Bak, chairman and CEO of Solar Alliance, announced plans for a solar array at the Curwood site, with power generation slated to begin in 2017. The project would provide skills training and jobs for 30 unemployed or underemployed area coal miners, he promised.
Plans for the cybermining complex were first mentioned during a Murphysboro City Council meeting, earlier this year.
On June 6, the Murphysboro City Council approved resolutions purchasing the Curwood property for $1 from Bemis Corporation of Oshkosh, Wisconsin, and then deeding the property to Solar Alliance.
No opening date for the complex has been announced.
Digital currency (or “cybercurrency”) was first introduced for use in electronic transactions in the late 1980s. Some is intended only for specific uses such as online gaming. Some early forms were, like conventional currency, theoretically redeemable for commodities such as gold or silver. Some has even issued by central banks.
However, Bitcoin, with its launch in 2008, introduced a distinct new breed of unregulated and decentralized “cryptocurrency,” secured by cryptography and tracked through public financial transaction ledger technology — the most common form of which is known as a blockchain.
The public database aspect of the currency creates demand for the type of transaction tracking operations now slated for Murphysboro.
Bitcoin was introduced on Oct. 31, 2008, with the posting of an online a white paper called “Bitcoin: A Peer-to-Peer Electronic Cash System” by a person or group named “Satoshi Nakamoto,” and the release of open-source Bitcoin software in 2009.
The identity of the developer continues to be a mystery in both tech and financial circles. About 4,000 variants of the Bitcoin have since been developed.
Because Bitcoins and other units of cryptocurrency currency are increasingly in demand, and currently exist in relatively limited supply, they have become the subject of speculative trading among some Wall Street investors.
Bitcoins were valued at $6,535.96 each, approaching the Chronicle’s deadline, by the trading website, CoinDesk.com.
Though some established Wall Street financial house have begun trading in Bitcoins, many continue to consider cryptocurrency inappropriate as an investment vehicle; noting price instability and lack of inherent value.
Most notable: Warren Buffet, widely regarded to be America’s wealthiest investor, who recently described cryptocurrency as “creating nothing.”
Nevertheless, increasing value over recent years has led to a growing number of computer aficionado with an interest in replicating the complex electronics processes necessary to track transactions and earn crypto monetary units.
Over the past decade, crypto mining has become a popular pastime in some college dorms around the nation, according to the technology news website, Quartz (https://qz.com).
Generally, estimates place the number of cryptominers around the world at about 5,000, according to the cyber currency news website Brave New Coin (https://bravenewcoin.com).
The authoritative Australian crypto mining research blog, Neighborhood Pool Watch, estimates there may actually be as many as 100,000. In April, the technology blog https://ahrefs.com/ used sophisticated scanning programs to identify 23,872 web domains that appeared to be mining cryptocoins.
Even if the cryptocurrency currency market ultimately collapses, the new deal with Solar Alliance will leave Murphysboro better off with a vastly more marketable industrial tract – complete with state of the art solar power, Mayor Stephens recent told the Southern Illinois.
However, over the short run, electricity demand could prove a problem, industry watchers say.
The problem, tech watchers agree, is that cryptoming is so power intensive that many miners have trouble making a profit on their cybercurrency after paying their electrics bills. The crypto mining process can involve multiple computers running for hundreds of hours, 24-hours-a-day, seven-days-a-week, to produce one coin.
As a result, specialized facilities – like the one now planned in Murhysboro — have been springing up around the world to provide the space and inexpensive power cryptominers need.
Washington State’s three-county Mid-Columbia Basin has reportedly become home to dozens of cybermining operations, attracted by a surplus of vacant buildings and the area’s low electric rates.
A firm known as CryptoMine has opened a 22,000 square-foot-data center in Montreal, Canada, to provide colocation hosting of crypto mining. Iceland – with its abundant, inexpensive, geothermal power has become a crypto mining mecca. The People’s Republic of China reportedly has one of the world’s largest crypto mining complexes.
That, in turn, has created skyrocketing demand for electricity in host communities – accompanied, in at least some cases, by power shortages and rate hikes for all power consumers.
Washington’s Mason County Public Utility District (PUD) recently banned new crypto mining projects. Quebec has temporarily halted crypto mining operations. Iceland recently announced it was now providing more power for cybermining than for residential use and warned it may not be able to meet demand.
Murphysboro Mayor Stephens in April announced that Solar Alliance had commissioned an environmental study on the Curwood site. He added an agreement for transfer of ownership of the site would not be executed until the study was complete. However, the study has yet to be made publicly available.
In September 2017, Solar Alliance failed to secure first-round grant funding from Illinois Power Agency, which was established last year to facilitate alternative energy project.