Georgia's crypto mining industry is booming. Here's how it could grow even faster. – Atlanta Business Chronicle – The Business Journals
Mawson Infrastructure Group’s largest cryptocurrency mining operation is tucked into a forest near a 6,000-person South Georgia town.
It was the perfect site for the Australian-based company (NASDAQ: MIGI). Formerly an electric substation outside of Sandersville, the 16-acre plot had sat empty for years. Now, massive servers are humming to mine 6.5 Bitcoin every day, and the company is expanding the facility by 150 megawatts by the end of next year.
Mawson Infrastructure is one of a growing number of cryptocurrency mining companies investing in the state of Georgia. Low energy costs and renewable and nuclear energy programs lured the company to set up operations. State incentives could cause the industry to grow even faster, cryptocurrency company executives say.
CleanSpark Inc. (Nasdaq: CLSK), a Utah-based company, has a $145 million cryptocurrency mining facility in Norcross and another in College Park. ISW Holdings Inc. and Bitman Technologies are investing $62 million into 56,000 mining rigs in Georgia. More than a third of cryptocurrency company Foundry’s mining network computing power comes from Georgia, according to multiple reports.
Cryptocurrency mining facilities are essentially data centers — another huge industry in Georgia — but less high tech. The facilities need massive amounts of servers and have huge energy bills. Those servers are completing the algorithm needed to produce a “virgin” bitcoin rather than storing cloud data. Crypto mining has long been criticized for its high energy consumption, though reports show more and more facilities are using non-carbon electricity sources.
Profitability for crypto mining is essentially the value of bitcoin against the cost of electricity, which is why companies prioritize locations with low operating costs.
Atlanta’s power rate is between 3 and 5 cents a kilowatt per hour, according to CBRE’s Digital Infrastructure in 2021 report. That’s tied with Dallas for the lowest power rates in the primary data center markets.
Interest in crypto mining drove up demand for shared data centers in metro Atlanta, which saw the third-most leasing activity in North America in the first half of 2021, according to CBRE’s report.
Georgia’s availability of carbon-free energy — particularly nuclear — is also a major asset for recruiting crypto companies.
About 26% of Georgia’s electricity comes from nuclear sources, and 8% comes from renewable sources, according to the CBRE report. Georgia Power runs the Simple Solar Program, where corporations can buy renewable energy credits to support the company investing in more solar projects. Several crypto companies use that program.
Georgia Power has a commitment to increase solar energy by more than three times what it is by 2025, putting the total amount of electricity coming from solar at 20%. The utility is also retiring all coal plants by 2035, and working to get two nuclear reactors online after several costly delays.
Those renewable and carbon-free energy options are important for companies looking to fulfill environmental, social and governance pressures and change the mining industry’s unsustainable reputation.
“We wanted to make sure a big site was in conjunction with a lower carbon footprint over time,” said Nick Hughes-Jones, Mawson Infrastructure chief commercial officer. “The fact Georgia is a nuclear state was a big draw.”
State support for crypto mining could propel the industry even further. Georgia legislators introduced a bill this session that would have granted tax breaks for cryptocurrency mining facilities at least 75,000 square feet, which would lower costs even further for companies.
House Bill 1342, sponsored by Rep. Don Parsons (R-Marietta), didn’t gain much traction this session and died after Crossover Day, the deadline for bills to pass out of the chamber they originated. The bill will have to be reintroduced next session.
“We believe that healthy competition among states is good for the industry,” said Rachel Silverstein, CleanSpark’s general counsel and vice president of compliance, in a statement. “Reducing our tax burden is certainly a compelling way to bring more bitcoin miners to particular states.”
Other states that have incentivized or regulated cryptocurrency have become leaders in the industry. Kentucky, another popular crypto mining state, already has tax breaks for miners, according to CoinDesk. Texas and Wyoming have growing cryptocurrency ecosystems because of state support and regulations.
“Every Bitcoin miner out there is saying they have a couple hundred megawatts going into Texas in the next couple years,” Hughes-Jones said. “Texas is going to thrive from those tax revenues and ancillary services.”
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