After dealing with a host of problems caused by a cryptocurrency mining craze, the former mayor of Plattsburgh, New York, on Thursday cast doubt on the economic benefits of miners setting up shop in a region.
“Counties and cities are enticed by all these promises of job creation, which — when you look into it, and I have — they just don’t materialize,” Colin Read said on CNBC’s “The Exchange.”
“We had one of the biggest bitcoin operators in the world operating here and generated only a handful of jobs,” said Read, who was elected in 2016 and served one four-year term. He’s a professor of economics and finance at SUNY Plattsburgh.
Bitcoin mining is an energy-intensive process that generates new bitcoins when miners, using high-powered computers, solve computational puzzles to verify transactions across the blockchain network.
There’s been a push by some politicians, such as Miami Mayor Francis Suarez, to attract bitcoin miners to their cities or states, particularly after China recently took steps to restrict miners’ operations in the country.
But, a few years ago, when bitcoin miners flocked to Plattsburgh, a small city of about 19,000 in upstate New York, for its cheap energy derived from the Niagara River, it didn’t take long before the city began to experience a huge spike in electricity prices.
After the crypto miners began using up the