Part of the controversy stems from the fact that Greenidge was once destined for the scrap heap. Its owner had gone bankrupt a decade ago, and the coal-fired power plant was retired and its operating permits abandoned. But then Atlas Holdings bought the plant in 2014 and spent $65 million to convert it to natural gas and get it running again. Greenidge restarted in 2017 and spent the next two years testing its bitcoin-mining strategy. Over time, it sold less electricity to the grid, devoting more and more power to its mining operations.
The plant’s shift to bitcoin-only operation comes at a time when New York state is fighting to keep cryptocurrency miners from taking advantage of the state’s cheap power. In 2018, the Public Service Commission gave municipal power companies the ability to raise rates on cryptocurrency customers.
Greenidge’s operations aren’t affected by PSC decisions, though. Their mining happens “behind the meter,” meaning it’s not affected by grid-level prices. And those operations appear to be fantastically profitable. Between February 2020 and February 2021, the company mined nearly 1,186 bitcoin at a cost of $2,869 per bitcoin. Today, one bitcoin is trading at $57,475.