Is waste coal mining green? Bitcoin mining company Stronghold raises $105 million in private placement

According to The Block, Pennsylvania-based digital mining company Stronghold Digital Mining announced on Tuesday that it had raised $105 million in two private placements. The investment funds mainly came from family trusts and MG Capital. Stronghold intends to use the $105 million to further finance the resumption of production in Pennsylvania, purchase cryptocurrency mining hardware, and fund more waste coal cleaning facilities. These fundraising activities were disclosed in a pair of U.S. Securities and Exchange Commission documents made public earlier this year.

Stronghold Digital Mining Inc., an ESG-focused bitcoin mining company, has announced it has raised $105 million as part of two private equity offerings. According to a spokesperson, participating investors include MG Capital and "several family offices."

Stronghold’s Scrubgrass Power Station primarily generates electricity using waste coal, a byproduct of coal mining that, in addition to being an eyesore, has significant environmental impacts, including causing harmful residues to seep into nearby waterways or drainage systems. Stronghold later introduced cryptocurrency mining hardware to the power mining facility, creating an economic incentive to “continue to clean up the waste coal piles and land.”

Bill Spence, co-chair of Stronghold, believes this is a positive sign for the cryptocurrency industry: "We are using 21st century cryptocurrency mining technology to remediate the impacts of 19th or 20th century coal mining in some of the most environmentally neglected areas of the United States.

Stronghold expects to have more than 28,000 cryptocurrency miners in operation by the end of 2021 and is currently negotiating to acquire additional facilities with more than 200 megawatts of power capacity. Stronghold has successfully restored 1,000 acres of previously deplorable land and returned it to the local community for use as playgrounds, sports fields and green space through its Bitcoin production powered by waste coal.

According to the University of Cambridge, the entire Bitcoin network currently consumes about 85 terawatt hours (TWh) of energy per year. This makes the Bitcoin network larger than most countries in the world in terms of annual energy consumption. And according to a September 2020 study (also conducted by the University of Cambridge), only 39% of the Bitcoin network is powered by renewable energy.

However, while this is an efficient use of waste, it doesn't necessarily mean it's better for the environment; burning waste coal still produces environmental toxins. According to the Energy Justice Network project, every 100 tons of coal waste burned produces 85 tons of toxic waste ash.