Mining Digital Assets Creates Opportunities For Institutional Investors And Communities Alike

taras-kulyk-headshotTaras Kulyk, SVP Blockchain Business Development, discusses how mining digital assets can create opportunities for institutional investors and communities alike. 

What do states like Georgia, Kentucky, Nebraska, Nevada, New York, North Carolina, South Dakota, Tennessee, Texas, Washington, Wyoming, and Montana have in common? They all are home to a rising tide of digital asset mining, including mining pools, mining companies (collocation and self-mining), financial services firms, and software/firmware providers.

The U.S.-based digital mining industry is taking advantage of numerous material factors, such as abundant renewable hydroelectric power—along rivers such as the Pacific Northwest’s Columbia and the Saint Lawrence River, which has its source in Lake Ontario. Cooler temperatures in many northern states also help keep the mining equipment from overheating and operating optimally. Additionally, the United States has excellent internet coverage, ranking #1 with approximately 7,000 Internet Service Providers (ISPs).

Although operating costs can be more expensive in the United States, miners benefit from the political stability needed for such a capital intensive, technical and large scale operation in a new industry. The United States and Canada have advanced electricity grid infrastructure, which can be used for cost efficient digital mining.  For these reasons, leading U.S. companies are exploring digital asset mining.

Currently, the United States and Canada account for 8.5 percent of the world’s digital asset mining, according to a Cambridge Centre for Alternative Finance report. However, North America has more publicly traded digital asset mining companies than anywhere in the world. Barry Silbert, founder of New York-based Grayscale Investments, observed digital asset mining’s shift away from China to North America as early as February 2020. “What I have seen recently, probably over the past three to six months, is a real growing shift toward attempts to move a lot of that activity outside of China into specifically the U.S. and Canada,” said Silbert.

Further enticing investors, U.S.-based Opportunity Zones could provide economic incentives to lure digital asset mining operations into certain communities. In December 2017, the Tax Cuts and Jobs Act created Opportunity Zones, which allow tax-advantaged long-term investment in economically-distressed communities. Across all 50 states, the District of Columbia, and five U.S. territories, there are more than 8,760 designated Qualified Opportunity Zones,.

 

Transforming the Rust Belt to the Digital Backbone of America

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The positive impact of digital asset mining has already been realized in many communities today. In small cities and towns throughout the United States, where globalization has taken a toll on the economy, digital asset mining is offering a new path to economic stability for individuals and communities alike.  

At Core Scientific, we're seeing first hand the positive impact our operations are having on the local economies. From our site selection, which has re-invigorated previously shuttered factories, to our employee training programs and clear career paths, we've quickly noticed the cascading economic effects of our operations in the community. In communities devastated by deindustrialization, our presence not only created jobs in the digital asset mining industry, but in the supporting industries, as well. 

This is the story we can be proud of across the United States: one of communities harnessing American ingenuity, building out the world’s leading digital asset mining infrastructure, and reinvigorating communities from coast to coast. 

We imagine a future where digital asset mines hum in these important and valuable communities, and create positive cascading impacts on the surrounding economy. We see a future where investors and local communities will both benefit from embracing digital assets.

With competitive energy rates, a diverse mix of renewable energy, and land availability, rural communities across the country are proving to be ideal locations for mining digital assets. U.S.-based investors benefit from clear regulatory guidance, while communities benefit with cascading economic effects.  

If you want to bolster your portfolio with the exciting opportunities of mining digital assets in North America, contact us today.