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(TNS) – Washington is bitcoin boomtown is doubling down.
In Douglas County, where is it easy access to cheap hydropower sparked at the cryptocurrency boom in 2017 – followed by a collapse in 2018 – local officials are betting that the high-speed computers and the complex "blockchain" technology that drove those digital currencies could now launch another , less volatile industry.
To accelerate the next phase, the county wants to build a "blockchain innovation campus," where researchers could develop new uses for the esoteric, computer-intensive technology – and, ideally, position this community for a share of industry when it arrives.
"There is more to the [cryptocurrency] Story of the boom and the bust, "says Lisa Parks, executive director of the Port of Douglas County, who hopes to locate the campus on the Columbia River.
The blockchain was conceived as a tool to allow secure financial transactions without banks or other intermediaries. But the blockchain concept, in which transactions are processed and recorded on multiple computers across a decentralized network, can work for any data-rich interaction.
Over the next decade, advocates say, blockchain will revolutionize everything from grocery supply lines to real estate contracts to self-driving cars.
This is Washington DC, with a huge pool of high-speed computing capacity and cryptocurrency expertise, and is well-positioned to host.
"We have some unique assets that make our region appealing to that industry," Parks says of the nascent blockchain sector. "Let's figure out a way to capitalize on it."
Douglas County's proposed innovation campus idea is part of a cryptocurrency boom, which swept through Douglas, Chelan, and Grant counties beginning in 2014.
The catalyst was cheap power, generated by the region's five big hydroelectric dams. The trillions of computer calculations necessary to produce bitcoins and other cryptocurrencies consume massive amounts of electricity.
Through 2017, as cryptocurrency prices soared (bitcoin went from $ 1,000 to nearly $ 20,000), cryptocurrency "miners" and investors from as far as China requested thousands of megawatts of power from the three counties' public utility districts. A megawatt is enough to power anywhere from 125 to 400 Central Washington homes, depending on time of year.
By early 2018, a collapse in cryptocurrency prices took the air out of the Central Washington bitcoin boom.
Local authorities and pushed back against the industry. Utility officials, concerned about a lot of power to an unproven, volatile industry, started to roll out a range of restrictions on miners.
In Chelan and Grant, utilities officials eventually hiked the price of power for new miners. Say, they have halted expansion of mining. In Grant County, for example, a total of 1,500 megawatts as of last August 31, 2011, to Grant PUD spokesman Ryan Holterhoff.
But Douglas County has charted a different course. In addition to a new industry, the county continues to encourage the old one – cryptocurrency mining.
The Douglas County Public Utility District has been increasing for new miners, for example, was not as sharp as in Chelan and Grant counties. As a result, Douglas County continues to see new mining operations.
In November, Bitmain, a large Chinese-based cryptocurrency company, opened a $ 20 million mine in Douglas County near the town of East Wenatchee. The mine, which features 8,000 individual computers housed in five warehouses, will use 12 megawatts of electricity, or enough to power anywhere from 1,500 to 4,800 homes.
Douglas County is also trying to resuscitate a defunct mining operation that has become a local symbol of the bitcoin boom and bust.
The failed venture, which was launched by the cryptocurrency pioneer GigaWatt, stalled last year after the company ran into construction and other problems and declared bankruptcy. Since then, the Port of Douglas County, which owns the GigaWatt site, has been talking with several competing investor groups about plans to use the facilities for mining, but also for other applications, such as cloud-based data analytics and artificial intelligence, that can use the same kind of compact, high-speed speed computing.
One of those investor groups, Texas-based Red Team Investments, also hopes to be involved in the innovation campus in nearby Rock Island.
Douglas County's continued embrace of cryptocurrency might seem like an overly risky move for a community that has been burned by bitcoin.
Gigawatt, for example, the Douglas County Public Utility District more than $ 310,000, according to its bankruptcy filing. The Port of Douglas County is on the hook for more than $ 50,000, Parks says.
But Douglas County officials see their crypto-friendly stance as a way for this less-than-prosperous rural community to leverage its one big asset-cheap power-to create a high-wage, data-driven industry.
Parks points to nearby Quincy, where the rise of massive data centers for sales and property taxes.
Douglas County's crypto-optimism is shared by the state Department of Commerce, which regards cryptocurrency as a potential way to diversify rural economies. The department's manager for business development, Evan Wendlandt, called the new Bitmain mine "a big win" for the county. The state agency is also supporting the innovation campus with a $ 50,000 grant.
More broadly, says Parks, the existing cryptocurrency sector is what is fueling the next blockchain interation. Douglas County now has a high-speed computing sector in the first place, Parks says, is "in large part because bitcoin and cryptocurrency mining pushed it in that direction."
Malachi Salcido, another local mining pioneer, says the local bitcoin sector, has been key to attracting the capital and talent needed for the industry's next phase. It is crucial to be volatile, he says. "What's happening in the [cryptocurrency] market right now is simply speculation, "Salcido says. "My message is not the baby out with the bathwater."
© 2019 The Seattle Times. Distributed by Tribune Content Agency, LLC.
