Jefferson County may soon enter the worldwide Bitcoin cryptocurrency “mining race.”
NYDIG, a Bitcoin mining company based in New York, along with Global Connect Communications, a Florida-based telecommunications company, reportedly have plans to build a Bitcoin mining facility at a remote site off Hwy. P in Hematite.
Mitch Bair, director of County Services, said Jefferson County has yet to sign off on Global Connect Communications’ final occupancy permit for the site because it needs to secure a permanent access easement from its next-door neighbor, the Missouri National Guard Armory, at 2740 Hwy. P.
Bair said the company plans to use the Armory’s gravel road to access the property, which backs up to Joachim Creek.
Once the occupancy permit is issued, he said, the Bitcoin mining facility may begin operations right away.
“We didn’t really have any other outstanding issues,” Bair said. “They went through site development, which took a while to get approved, but they have all their building permits, all the stormwater (approvals), so everything is in compliance.”
He said it is the first facility of its kind to pursue operations in Jefferson County.
“We’ve had a few others kick the tires a little bit, but this is the only (Bitcoin facility) so far (seeking to open) in the county.”
County Services representatives have communicated with Jake McCorkle, chief executive officer at Global Connect Communications, regarding the mining project, and Hematite Deputy Chief John Chartrand said the fire protection district is in communication with NYDIG representative Patrick Sutton about the facility.
Bair said he did not know if the two businesses were working together or had any affiliation.
Representatives from NYDIG and Global Connect Communications did not respond to requests for comment before the Leader deadline.
Because the concept of Bitcoin mining is so new to the area and new to Hematite Fire, Chartrand said the district is closely reviewing safety protocols. The facility will operate 24 hours a day, seven days a week, he said.
The facility’s location next to an Ameren electrical substation is perfect for Bitcoin mining, which requires a lot of power to run the mining system and keep the computers cool, Chartrand said, adding that Ameren will need to be contacted immediately if there is a fire at the facility due to its proximity to the substation.
The property’s entrance lies in the floodplain, which could make it challenging to access the facility in the event of an emergency, he said.
According to its website, NYDIG has created an “at-scale, resilient Bitcoin mining business across North America.”
“As a market leader in Bitcoin mining, NYDIG is proud to play a significant role in securing the Bitcoin network,” the website says.
Global Connect Communications provides a variety of services, including network management, data center support and internet access, according to its website.
What is Bitcoin?
Bitcoin is a form of cryptocurrency first introduced in 2008 by an anonymous person or group called Satoshi Nakamoto, according to a guide published by the BBC.
Like the U.S. dollar, British pound or Mexican peso, Bitcoin relies on a user’s trust to be effective; as more people use Bitcoin to purchase actual goods and services, the cryptocurrency becomes more valuable.
Bitcoin is a volatile, high-risk and speculative cryptocurrency, the BBC said. On Aug. 21, one Bitcoin was worth $112,673. However, a day earlier on Aug. 20, a Bitcoin was worth $114,336.80.
Bitcoin can be used at more than 250 companies and stores, such as Home Depot, AMC Theatres and Bass Pro Shops, according to BitPay, a cryptocurrency payment service provider.
Unlike physical dollars and cents, the inventors of Bitcoin set a limit on the amount of Bitcoin that can be circulated.
“There will never be more than 21 million Bitcoins,” according to the BBC guide. “This prevents the kind of erosion of value that plagues ‘normal’ currency.”
Akin to mining for precious metals like gold or silver, the Bitcoin’s built-in scarcity has created the so-called mining race, or the competition to gather the most Bitcoins before they are eventually all collected.
What is Bitcoin mining?
Unlike paper money, which can be stored in a bank, wallet or purse, Bitcoin is stored on a public ledger or transactional record called a blockchain. To gather more Bitcoin, miners must solve complicated math equations using computers.
By solving the complex puzzles and adding a block of transactions to the blockchain, new Bitcoin is created, according to the Crypto Council for Innovation. While anyone can mine Bitcoins using a home computer, the process is faster and more effective if done on a large scale, such as a mining operation.
A great deal of energy is required to solve these puzzles and attain Bitcoins, so the location of a mining facility is important. Mining companies tend to gravitate to countries with a cheaper and reliable energy grid, with the University of Cambridge identifying the U.S., China and Kazakhstan as the highest producing countries of Bitcoin.
Texas “dominates” the Bitcoin mining industry in the U.S., with nearly 30 percent of all mining in the country occurring there as of 2023, according to CNBC.
In Missouri, a bill called the “Digital Asset Mining Protection Act” went into effect in 2023, giving express permission to mine for cryptocurrency here, whether at home or as part of a larger business.
The law allows large-scale digital asset mining businesses to operate in any area zoned for industrial use and prohibits local governments from placing special fines on sound decibels associated with mining. The law also exempts virtual currency from state, county or local taxation.
According to the Missouri Department of Economic Development, cryptocurrency mining company SPRE Commercial Group Inc. established a center in Montgomery City in 2023, investing $950,000 and creating nine new jobs.
Altair Technology LLC is a St. Charles-based Bitcoin mining company that supplies hardware, parts and accessories. The company also consults with mining farm operators and investors, according to its website.
Bair said a couple of other developers, including an AI data storage business, have looked at properties along Hwy. P in the Festus area.
“This is a really popular area because of the high electric capacity line that runs through the Ameren station,” he said. “There’s a lot of interest in this corridor, generally, and it’s growing nationally. I believe we’re going to see more of these developments near a lot of energy consumption.”