Various towns in Northern Italy are falling under pressure to rising energy costs while looking to achieve more environmentally friendly methods for producing energy. As a great example for why the call for Proof-of-Work (PoW) mining to be banned in the European Union (EU) was dropped by regulators, a small municipality in Trentino, Italy has been solving economic and environmental issues around energy with Bitcoin mining.

Borgo d’Anaunia is the first municipality in Italy to mine Bitcoin from the energy that is produced from their hydroelectric dams. Mayor Daniele Graziadei spoke with Coindesk about the benefits of Bitcoin mining for the town.

Borgo d’Anaunia is located near the Swiss Alps and experiences dry seasons during the winter. Graziadei says it is hard to justify the costs for maintaining these plants when there is a lack of snow and rain to raise water levels. In previous years they would shut down the facilities but with Bitcoin mining they are now able to keep the dams running year round.

This is made possible by Alps Blockchain, an Italian mining startup that was founded by two 23-year-olds from Trento, Italy. Co-founders Francesco Buffa and Francesca Failoni met while both were learning about Bitcoin and mining. 

The two started a mining firm together in order to gain access to distressed hydropower plants. The margins for home mining were too small for a profitable mining operation. The average utility bill for a resident in Italy will cost about $0.22 per kilowatt hour while in the U.S. it costs someone an average of $0.13 per kWh. Alps Blockchain is able to pay a premium of at least 35% more than what the government pays for their hydropower.

Graziadei explained that it was easy to convince the council and his constituents to set up the application-specific integrated circuit (ASIC) machines to start mining Bitcoin in the plant. With consistent dry seasons and no government incentives, mining Bitcoin was the only economical and environmentally friendly solution for the municipality. With Bitcoin mining the costs for maintenance are covered by Alp Blockchain, using hydroelectricity falls in line with using a renewable energy source, and the municipality is able to benefit from consistent and affordable energy.

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