BONNER — Bitcoin is taking a bath these days, dragging the rest of the volatile cryptocurrency world down with it.
But despite the drop in value of those electronic coins by nearly 80 percent from an all-time high a year ago, operations keep humming along here at one of the largest crypto-mining centers in North America.
“We’re still plugging away as usual,” Jason Vaughn assured.
Vaughn is site manager of the Bonner facility for Canada-based HyperBlock Inc., a new behemoth on the relatively new block after buying out Project Spokane earlier this year. It bills itself as “North America’s diversified crypto leader.”
“As usual,” in Vaughn's world, is the nonstop whirring of more than 13,000 servers in the old planer building alongside Highway 200.
On Dec. 17, 2017, the price of a single Bitcoin reached a high of $19,650. Last month it dipped below $4,000, and on Friday hovered just above $3,100.
HyperBlock CEO Sean Walsh was in London in September to deliver a talk at the World Blockchain Forum. Walsh showed a 55-second YouTube video of the operation in Bonner.
The un-narrated video starts and ends with a snowy overview of the mill site on the Blackfoot River. It provides a quick tour of the inside of the immense building, interposing several short factoids.
The viewer is told the facility is 240,000 square feet (roughly four times the size of the Washington-Grizzly Stadium floor). There's "plenty of room for expansion" in the building. The operation has 20 megawatts (MW) power capacity “with 60 MW on site expansion.” The operation has "secure access to low cost power" and "four distinct revenue streams."
Walsh pooh-poohs the notion that Bitcoin's bubble has burst. In its 10-year history the market has risen and fallen on a regular basis.
"If you dig into the data … (it) is absolutely an anti-bubble over longer time horizons," he said in London.
For example, when Bitcoin’s price approached $20,000 a year ago, it capped a 2017 that started at $974. The dizzying highs and lows are part of the game, Walsh said in London. “It just keeps happening. It’s the rule, not the exception.”
The opposing views are almost humorous to track.
“Bitcoin is pretty much dead, says teenage crypto phenom,” a MarketWatch story on Friday was headlined.
“Reports of Bitcoin’s demise have been ‘greatly exaggerated,’ " countered a Forbes story.
“A year after the crypto bubble burst, will Bitcoin ever recover?” wondered Bloomberg.
“Bitcoin wasn’t a bubble until it was,” opined the Wall Street Journal.
In an email on Friday, Walsh said diversification is a key to his business.
“We built HyperBlock to weather the volatility and pressures of the crypto market because we believe in the long-term promise of the technology,” he wrote.
It’s not easy in a “very competitive” business, he said.
“The prolonged downturn in crypto pricing is putting many crypto miners out of business, which is why we tend to be a little cautious and protective when it comes to talking about our business,” Walsh said.
HyperBlock recently launched Hypervault, a “fully insured custodial solution” for cryptocurrency. The company reached an agreement with a Caribbean-based bank to use Hypervault to secure crypto assets, giving investors a measure of comfort against market downturns and imminent government regulations.
Bitcoin is the major player, but not the only cryptocurrency the Bonner plant mines. But others are faring even worse: Ethereum’s “ethers” were bobbing just above $80 on Friday. They were worth more than $1,400 in January.
Bitcoin has another anniversary coming up.
It and the blockchain technology that underpins it — and many claim will far outstrip it — turn 10 years old on Jan. 3. That was the day in 2009 when someone or someones calling themselves Satoshi Nakamoto created the “genesis block,” the first entry in bitcoin’s global transaction register.
At first it had no practical application. The initial transaction didn’t occur for more than 16 months. Then a Florida-based programmer named Laszlo Hanyeca paid 10,000 Bitcoins for two Papa John’s pizzas. Next May 22, cyber-geeks of a certain world will celebrate the ninth Bitcoin Pizza Day. By today’s standards, even considering the cratering market, Hanyeca paid more than $30 million for the pizzas.
Project Spokane opened Montana’s first crypto mining operation in Bonner in April 2017. Soon after, area residents began voicing complaints about the steady drone emitted by the hundreds of fan blades that cool the huge computer server banks.
While 2018 has been one of a steady downward spiral in prices, the local plant has had ups as well as downs.
Most of the noise complaints were mollified by the installation of new blades in the 144 exhaust fans on the roof in mid-July. That was a couple of months after the Missoula Development Authority Board turned down a request by mill site owners and HyperBlock to use tax increment financing from the mill district to help pay for the fan change-out.
The issue, compounded by the facility’s ravenous appetite for electricity, gave rise to a Missoula County proposal to place a one-year moratorium on new or expanded cryptocurrency operations. In September, county commissioners rejected that plan.
Vaughn said expansion remains in the plans at Bonner.
"We're always looking to expand. That's not news," he said.
“We are very fortunate that we have such a dedicated, experienced local team who help ensure we’re running as efficiently and productively as possible,” Walsh said. “And we deeply appreciate the ongoing support of the local community.”