Factors that contributed to the recent announcement of a $ 50 million investment in Paducah by a tech company specializing in cryptocurrency mining have sparked enthusiasm among local officials to launch projects. similar in the future.
Blockware Mining Inc., a Chicago-based company, has purchased five acres in West Paducah Industrial Park and hopes to innovate in the not-so-distant future.
The company plans to hire 20 new employees over the next 24 to 36 months and estimates that the new facility will have a recurring annual impact of nearly $ 6 million on the community.
Greater Paducah Economic Development worked with Blockware for about a year on the project, said Bruce Wilcox, President / CEO of GPED.
A number of different organizations have played key roles, including Navier, a mining digital currency expert, Big Rivers Electric, Jackson Purchase Energy, Paducah Power System, Paducah-McCracken County Industrial Development Authority, Town of Paducah, McCracken County , the Kentucky Cabinet for Economic Development and other community partners.
Wilcox credited, among other things, Kentucky’s newly enacted legislation with the sales tax incentive and affordable and competitive electricity rates, as contributing to the success of the project.
“Having the relationship that we have with Navier solidified it all,” he said. “And, we’ve also garnered a lot of interest from other cryptocurrency companies. It really put us on the map.
Big Rivers Electric, which has a substation in Industrial Park West, is also investing an additional $ 12.7 million in utility infrastructure upgrades to provide 100 megawatts of electricity.
“Big Rivers is pleased to partner with Jackson Purchase Energy to bring an economic development project to this region,” said Bob Berry, President and CEO of Big Rivers Electric Corporation, following the June 9 announcement. .
“Blockware’s announcement to move to Paducah is great news that will benefit our entire co-op membership system. “
Importantly, Blockware’s bitcoin mining operation involved the purchase of land, Wilcox said.
“This is the first time that land has been sold for economic development in Industrial Park West in almost 20 years,” he said.
“Land was given up under other economic development agreements, but we actually sold the land which was a great cash asset for the Industrial Development Authority (IDA).”
Industrial Park West is owned by IDA, which is a quasi-government entity.
While Big Rivers provides the electricity, Paducah Power System was also involved in the project, Wilcox said.
“When we started talking with them (Blockware) a year ago, they needed 50 gigabytes per second data service with redundancy and Paducah Power set up the fiber optic network to accommodate this. to that, ”he said.
“And, since then, Comcast has also come to town with so many services. This is a good opportunity for Paducah Power and Comcast to secure the fiber service there.
“It’s a good win (for everyone).”
State Representative Steven Rudy R-Paducah, the House Majority Leader, said the new legislation aimed at attracting cryptocurrency miners came after concerns were raised by representatives of Core Scientific, a blockchain hosting facility in Calvert City.
“It all started with a conversation with this factory in Marshall County, where they basically said ‘we’re a manufacturer, but we’re not treated like other manufacturers because our technology is so new,’” Rudy said. .
“Basically what we did with these two (recently passed) bills was change the programs that already existed to include bitcoin manufacturing as well as other forms of manufacturing. Literally when these (original) laws were passed years ago, and one of them not even ten years ago, we had never even heard of this technology.
“That’s how it all started. But because we have done this we have become a national leader in a growing industry and there have been a lot of international articles and publications about it, ”he said.
“The Frankfort economics team is going out and actively recruiting this and the local economic development teams are, as they should be. It’s kind of what we do as lawmakers, give them tools for the toolbox and let them do the work and go out and recruit … and it looks like it’s happening.
“There are going to be significant investments in Kentucky because of this legislation. Now, will it create hundreds of new jobs? We don’t know what the potential will be.
Rudy said he believed there might also be some potential to attract interest from companies that initially invested in cryptocurrency in China, “who are now looking for new places to go. We think we are. can land here (investments) that we probably wouldn’t have had the chance to land otherwise. ”
State lawmakers have declared cryptocurrency mining to be part of the “new” economy.
“It’s a new type of manufacturing that we had never heard of before. Kids going to college, kids now getting that computer training in high school, things that previous generations never thought of, this will be a new way for them to (find a job) to stay in. house, ”he said.
“We are excited about the potential and who knows? The way we look at it is that everything is forward looking. It doesn’t work. If it all comes here and grows, that’s great.
“But if it doesn’t, we haven’t cost the state anything.”