Bitcoin Miners Flock to Kentucky Coal Towns
In March of 2021, Kentucky was able to pass House Bill 230 which incentivizes commercial miners with a number of tax breaks for their operations. Commercial miners are allowed to be tax exempt for the energy and equipment they use. In order to receive these exemptions, Senate Bill 255 requires that Bitcoin and cryptocurrency mining facilities have a minimum capital investment of $1 million.
Foundry Digital, a subsidiary of Digital Currency Group, states that about 12.4% of the U.S. based hashrate resides in Kentucky while New York trails behind with 9.53% and Georgia takes the top position of 34.17%.
Belfry, Kentucky has seen an increase of investment in the region since Bitcoin and cryptocurrency legislation has been passed. Blockware Solutions CEO, Mason Jappa, stated that the reason for the company’s choice to build facilities in Belfry was because of the state’s incentive program and pro-mining stance.
Blockware Solutions, a privately held cryptocurrency mining and infrastructure firm, built the first of three mining farms in the area. The facility’s current power consumption is 20-megawatts (MW) and could expand to 75MW in the near future.
Belfry currently has fewer than 500 people but Kentucky State Representative Angie Hatton is hopeful that Blockware Solutions will be able to stabilize the region's steep electricity rates. Not only will Belfry see an increase in economic activity, the town residents will also enjoy saving money on their energy costs.
With a low population and access to a grid, Jappa shares the same sentiments as Hatton. Belfry provides an excellent opportunity where Blockware Solutions and the town residents will be able to benefit from one another. Jappa states that he and his company found the perfect combination of political sustainability and low-cost energy that supports the local economy. The town is also in an environmentally safe, sound, and cool which are all ideal attributes for Bitcoin and cryptocurrency mining facilities.
Future investments in the region will continue as long as companies like Blockware Solutions receive support at the federal and local levels.