The roar of the mining rigs is gone, and the Bitcoin boom in Kentucky is over

Written：Dina Temple-Raston

Translated：Luffy，Foresight News

If you drive to the outskirts of the city of Campton, which has a population of less than 400, you'll hear the low chime of cryptocurrency mining equipment coming from the woods. As you get closer, the source of the murmur becomes clear: a cluster of low, metal-shaped containers, arranged in a semicircle, with fans and processors humming one after another. There are barbed wire, surveillance cameras around the venue, and two security guards are on duty in a pickup truck outside the cordon.

 

Metal containers like these are scattered all over the hill and sit right on the site of a former coal mine. Inside the container, a dedicated computer is working at full speed to solve complex math problems: validating bitcoin transactions through a competition for computing power, earning a tiny amount of bitcoin as a reward.

 

In the short period of 2021, the region seems to have ushered in a new prosperity, with the brand of Bitcoin everywhere. At its peak, Kentucky contributed about 20% of the mining power of proof-of-work cryptocurrencies in the United States.

 

But here, booms and busts have their own historical trajectories. Local officials say it's difficult to pinpoint the number of cryptocurrency mining farms still operating in the eastern part of the state due to lax regulation and generally low transparency in the industry. But locals know that the craze has begun to recede.

 

"They're either setting up mines on somebody else's land or paying a local company to provide the space," Anna Whites, a lawyer who has represented several crypto mining clients, alleged, "They would pay a down payment or convince the landowner to pay a down payment, and then mine for the first three months and disappear near the start of the next billing cycle."

 

When Mohawk Energy launched a crypto mining project in Jenkins, Kentucky, in early 2022, local officials said it would be different. Mohawk Energy, co-founded by Kentucky Senator Brandon Smith, bought a sprawling 41,000-square-foot building and eight acres of surrounding land. The company leases most of the space to a cryptocurrency mining company from China, while the rest of the area houses classrooms and hands-on training centers designed to teach locals how to repair iPads, maintain bitcoin mining rigs, and develop the skills needed for the digital economy. It was a big deal for Jenkins: The project was launched on local public television, and video footage showed toolboxes, workers and smiling government officials.

 

"Mohawk's plan is to hire and train retired coal miners and disabled veterans who have returned to eastern Kentucky and can't find work," says Whites, one of her clients, "and the project has offered close to six figures in salary, among other promises, and has vowed to put some of the mining proceeds into training programs to help them grow." For a while, it did work."

 

In the brief period of about 18 months, Whites said, things looked promising: 28 families realized real gains, one in each family got a steady job, and about 30 relatives found work nearby. But when we asked about the current situation, she paused. "I'm sure most of them are out of work again."

 

The change came quite suddenly. The Chinese partner filed a lawsuit against Mohawk for breach of contract, and Mohawk filed a counterclaim. The cryptocurrency gains shared by both parties were never cashed out. Now, with some Kentucky residents disillusioned with Bitcoin mining, they are talking about AI data centers in the same way they once talked about coal mines and hash rates, with a cautious anticipation. They say AI could lead to jobs, fiber-optic networks and long-term growth.

 

Colby Kirk runs a nonprofit called One East Kentucky, which works to drive economic development in the region. He remembers the moment the conversation turned when he attended the Kentucky Economic Development Association's spring meeting in Paducah in April.

 

"There were a couple of site selection consultants on the panel, and they talked about data centers," he recalled, "and they mentioned that there were a lot of large data centers along the I-81 corridor in northern Pennsylvania and were looking to see if our community could be prepared for that type of investment? One of the advisors responded that there were a number of conditions that needed to be met."

 

These conditions proved to be no easy feat: flat land, ample power, fiber optic networks, and a workforce with wiring and welding skills. Coincidentally, according to the One East Kentucky organization, the number of welders in the area is about twice the national average. It's not hard to see why, because in a metal and stressful environment like a coal mine, welders are the key to keeping everything running.

 

The old infrastructure remains in place: substations, sturdy grounds, cooling systems, and power-hungry hardware that needs to be restarted. "Maybe a facility like a data center can be part of the solution," Kirk says.

 

So when the panel was over and the Q&A session began, Kirk said he asked a question that stuck on his mind.

 

"You know, 50, 60 years ago, a computer took up more space than my office, and now the cell phone in my pocket is more advanced than the computer that sent astronauts to the moon," he recalled, "Are these data centers going to be going to be 30 to 40 feet tall and millions of square feet tall?" Or will we be leaving behind a lot of unused warehouses or industrial-grade construction waste?"

 

He said the adviser did not give a satisfactory answer. "Here's the problem," Kirk says, "we don't know anything about the future of this type of technology."

 

This uncertainty unnerved Nina McCoy. She was a high school biology teacher in Inez. The coal town rose to fame in 1964 when then-U.S. President Lyndon Johnson used it to rally support for his "war on poverty."

 

"It might sound terrible," she said, "but if they choose to build this thing here, it's a problem." We've lived here for so long, and we've long seen the pattern: people always throw things they don't want in this kind of place."

 

Her suspicions stem from personal experience: In October 2000, a massive coal slurry spill at a coal mine in the upper reaches of the Coldwater Fork River polluted the water that flowed through her homeyard, leaving residents of Inez without drinking tap water for months.

 

"It took us a while for those who live downstream to learn about it, but the school system had to shut down for about a week until an alternative water source was found," she said.

 

To this day, many residents of Inez do not trust running water.

 

So when McCoy hears the hype about AI, it's as if she's hearing another voice: It's another promise that comes at a price. "We allow these people to be called 'job creators,'" she said, "whether it's artificial intelligence, cryptocurrency, or whatever, and we grovel to them and let them dictate our community just because they're 'job creators.'" But in fact, they're not job creators, they're profit makers."

 

And profits always leave a trace.

 

AI data centers require staggering energy consumption, with a single ChatGPT search consuming up to 10 times more energy than a regular Google search, and generating high heat when running. To stay cool, these facilities consume billions of gallons (note: 1 gallon = 3.79 liters) of water each year, most of which evaporates. Residents are wary of other facilities and their wastewater discharges, fearing that the new facilities could affect fish and destroy the land, which Kentuckyers want to protect.

 

Still, some locals see the potential of AI and even the possibility of progress.

 

"Artificial intelligence is already in our lives," said Wes Hamilton, a local entrepreneur who was involved in the heyday of cryptocurrency mining in Kentucky, "Siri, ChatGPT, bots — everything you can think of without AI." "Bitcoin is a one-shot deal, you create it, and only the owner of the mining rig makes a profit," he said.

 

According to Hamilton, data centers are expected to attract investors, engineers, and even businesses willing to stay there for a long time. AI practitioners from all over the world will flock to Kentucky, he said. Although he acknowledged that he had lost a lot of money in cryptocurrency projects in the past, he insisted that this time it was different.

 

When Bitcoin first emerged, legislators offered generous tax breaks to attract miners: companies investing more than $1 million were exempt from paying sales taxes on hardware and electricity. In March 2025, Kentucky Governor Andy Beshear went even further and signed the Bitcoin Bill of Rights.

 

The legislation, shaped as "defending personal financial freedom," aims to ensure the right of Kentucky residents to use digital assets. The first draft went even further, seeking to prohibit local governments from using zoning regulations to restrict cryptocurrency mining, a provision that drew opposition from environmental groups. The language was eventually weakened, but the core intent remained the same: in Kentucky, digital resource extraction can continue to roar.

 

That's why we'll stand outside this mining facility in Campton and stare at the semi-circular metal complex in the woods. The mine operates day and night, even on Sundays. Now, with the price of Bitcoin fluctuating around $100,000 and big miners talking about moving to artificial intelligence, one has to wonder: Can Bitcoin mining in Kentucky make a comeback?

 

Mohawk's bitcoin mining business may even make a comeback. Anna Whites said the parties were originally scheduled to enter the arbitration process on May 12. "I'm hopeful," she told us, "and I really want them to sit down and talk, and say, 'You've got this awesome facility, let's just get started.'" 」

This article is sourced from Foresight News:

https://foresightnews.pro/article/detail/84700

Respectfully submitted by the AIC Team

June2, 2025