Dividends and Bitcoin-mining power plant raises ire of environmentalists

If you are a dividend buyer of stocks, part of your holdings likely includes an utility or two because they produce regular profits, are regulated by people who tend to raise prices which allows the utility to make profits to pay dividends. This is a good thing for the investor.

Many years ago, there was an inherent policy that growth is good and any business which produces jobs and taxes for the community is a good thing. That idea is likely changing with more people saying growth is good, but at the right balance.

In the world of finance, bitcoins have come to mainstream and various financial institutions accept them and make products for people to buy, if desired. The bitcoin is made or kept value in servers, think about the big tech companies of Google and Facebook among many companies they have buildings that have servers to run their systems. If you wish you can buy Real Estate Investment Trusts (REIT) that the tech companies use or it is normal business activity.

According to an article by Michael Hill of the Associated Press, to have large scale bitcoin mining, the companies need inexpensive power to run the hug power gobbling computer arrays that create and transact cryptocurrency. The companies involved solution is to buy their own power plants. This has environmentalists alamed.

An example is the Greenidge Generation runs a gas plant near the shores of Seneca Lake in the Finger Lakes region on New York state (if you fly over them, the lakes look like fingers) to produce 44 megawatts of electricity to run 15,300 computer servers, any additional energy produced goes in the state grid system. The megawatts needed for the servers could power 35,000 average homes.

Environmentalists see a threat, the fossil fuel plant will add to the greenhouse gases and they are asking the state regulator to deny renewal of the plant’s air quality permit and put the brakes on similar products.

Bitcoin mines unlock bitcoins by solving complex, unique puzzles. As the value of bitcoin goes up, the puzzles become increasingly more difficult, and it requires more computer power to solve them. Greenidge said it mined 729 bitcoins over 3 months and each bitcoin was valued at $59,000. The mining company says it has brought 45 high paying jobs and made a significant contribution to the area in taxes and capital improvements.

Greenidge said it in compliance with its permits as it has bought carbon offsets.

Linking to dividend paying stocks, we all need electricity to continue our normal life and how that electricity is generated is a concern for many. The easiest ways are water, sun and wind, but some sort of fossil fuel will be needed into the distance future. Environmentalists sometimes see the world as black and white, utilities see the world needing a product and regulators often sided with the utilities. In the near future, that could alter or make the decision process longer, however utility companies have time on their side.

There are more questions than answers, till the next time – to raising questions.

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