#48: Canary in a Coin Mine
Bitcoin mining, involving pure information rather than raw materials, is just a sexier term (is mining sexy?) for a process that is more like Sudoku puzzles for computers than digging holes in the ground. Even solving invisible math problems, though, requires energy, and thus cryptocurrency mining has a very real, if slightly less direct, relationship with the earth and its natural resources: Certain towns are better places for cryptocurrency mining, depending upon their possession of the four conditions for doing it profitably: “stable government, cheap power, good internet, and space"—anywhere that’s good for stacking up servers and letting them run, basically. The rise of this newly valuable, artificial resource, not surprisingly, has precipitated a shadow gold rush in towns like Wenatchee, Washington and Plattsburgh, New York, which, satisfying those four criteria, now have to decide whether this mining is good for them or not.
You might expect towns to welcome this sudden economic relevance, regardless of its broader implications, the same way they welcome Amazon distribution centers, but there’s a small problem: Cryptocurrency mining doesn’t really require people, and for cities, that’s an existential conundrum. Plattsburgh banned Bitcoin mining after observing that it was forcing up the town’s electricity prices without generating tax revenue (most of the investors live elsewhere) or benefiting property prices (the miners lease the buildings, rather than owning them). Mining creates minimal jobs—the number of people it takes to keep a bunch of servers running—and one Plattsburgh resident observed that “the restaurant across the street employs more people than the Bitcoin mines.” Almost entirely decoupled from human labor, this approach to cryptocurrency mining is more like arbitrage than any kind of material production. At least the frackers who showed up in North Dakota built “man camps” (and eventually abandoned them).
Bitcoin and its supporting activities are easily implicated in a variety of contemporary problems, but cryptocurrency mining is really just another thing that computers do. Lately, it's been one of the most valuable applications of server capacity, so it shouldn't be surprising that more is being allocated toward mining. If not this, it would be something else. The bigger concern for small, post-industrial towns, which banning one enterprise won't solve, is that we lack any broader framework for choosing the "right" way to allocate computing power or the energy that fuels it. Instead, we pretend it's unlimited and act surprised when it throws entire towns off balance. The real digital dystopia, of which cryptocurrency is just one symptom, is that ubiquitous connectivity makes the whole world function more like a computer: Everything is a perfectly liquid commodity, expressible as data and available anywhere, and towns like Plattsburgh become distributed clusters in a global machine that remote operators can spin up and power down according to the machine's—not the town's—needs.
Reads:
An interesting critique of YIMBYism and the pro-density side of the Bay Area housing debate. Worth reading just for its great summary of how urban housing evolved in the United States over the past hundred years.
"After Authenticity" by Toby Shorin. "Authenticity has expanded to the point that people don’t even believe in it anymore."
Until next time,
Drew