The promise of a new cryptocurrency mining company in downtown Paducah has been fulfilled quickly.
Mayor George Bray recently confirmed that Griffin Blockchain Services, Inc. leaving Paducah.
“They’re chasing lower electricity rates,” Bray said.
In November, 2021, Griffin Blockchain acquired the 120,000 -square -foot AmerisourceBergen facility on North Third Street. The building is now for sale.
“They’re looking for more rural sites in the surrounding area, but unless they find it in McCracken County, it’s not going to benefit (us),” Bray said.
When China bans cryptocurrencies in 2021 – citing financial crime and economic instability – Kentucky is an attractive alternative because of state laws that provide tax deductions for miners.
The state enacted legislation in 2021 that provides a sales tax and applies tax exemptions to commercial and electrical properties used by blockchain companies for cryptocurrency mining purposes.
However, events in the last world may have influenced the company’s decision to locate it elsewhere.
“It’s really difficult in this market: What’s happening abroad in Ukraine, the uncertainty in the market right now – the uncertainty of electricity rates, in particular,” Bray said.
“I feel like I know they need a more rural location, and we’re all on the learning curve with this market.”
Doug Handley is the director of finance, resources and rates for Paducah Power System.
“We have rates available to customers that meet certain criteria, and those rates are tailored for crypto miners because they require you to have a load of at least 1 megawatt and require a 95% load factor and require you to be interruptible,” Handley said.
“And, they’ve met all of those criteria. In exchange for meeting those criteria, they get a market base, an adjustable rate which means we pass into them our real cost of power, plus a loss factor, which is really our real cost. So, what happens in the market, they go in and buy a building and make a shop and they come and say they want a rate, ”he said.
“We told him what he had and he said ‘okay’ but I don’t know if he knew that based on the market and the market could change. And, yes .. it’s a huge change and it’s not our fault.
Griffin Blockchain representatives did not respond to interview requests.
The company specializes in Bitcoin mining. To earn Bitcoin, a company or individual uses computer hardware to perform an algorithm – that is, a step -by -step procedure for performing a calculation – in a process called mining.
As miners acquire Bitcoin, the algorithms become more complex, require more advanced hardware and higher energy requirements.
