July 2—Perhaps we don’t need to be so concerned about this mysterious “data center”—widely believed to be a cryptocurrency mining facility—planned for the Morgantown Industrial Park after all.
Because for a month and a half, the cryptocurrency has been in free fall.
It started in May when a type of stablecoin collapsed. Stablecoins are cryptocurrencies that are anchored to real-world assets and/or are meant to maintain a dollar-for-dollar exchange (one crypto unit equals one US dollar). terraUSD was an experimental stablecoin that relied on an algorithm, but the algorithm failed and the currency crashed, dropping to $0 and taking its sister cryptocurrency Luna with it.
This in turn set off a chain reaction that decimated the value of even well-established currencies like Bitcoin, which at the time of this writing had fallen below $19,500 per coin from a high near $69,000 per piece in last year.
The crypto downturn has also had effects in the real world. Booming crypto firms began mass layoffs and canceled job offers, and some even froze withdrawals as they began to turn red. Investors, especially those who didn’t get in early and/or only invested a few thousand dollars, lost half or more of their investments. And one company actually had to shut down a mining facility because it cost more to operate than the value of the cryptocurrency it was generating. As we’ve talked about before, crypto mining operations require tons of energy not only to power the many equation-solving computers, but also to keep them cool.
It’s that last bit that makes us wonder if the crypto-mining rig watching the MIP might just change its mind.
That said, many crypto-bros who entered the ground floor aren’t too worried. Some are even excited to see the currency hit a bear market, as it shuts the least trusted cryptocurrencies out of the game. According to a recent CNBC article, there are around 19,000 cryptocurrencies and dozens of blockchain platforms. (Blockchain is the underlying mathematical equations and puzzles that give cryptocurrencies their value. Crypto mining rigs solve blockchain equations to unlock new coins and store them in a ledger so they cannot be spent twice.) Several sources compare the current crypto crash to the dot com crash of the late 1990s: the “weak” companies and scammers will be weeded out and the “strong” ones will become the Amazons and eBays of tomorrow.
Even if crypto rebounds – as it likely will, if not in a few months, at least in a few years – we’re still hoping that today’s market volatility will be enough to deter any company from building a crypto “data center” here.