Bitcoin mining is not your grandfather's form of mining - KPAX.com | Continuous News | Missoula & Western Montana

Bitcoin mining is not your grandfather's form of mining

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BUTTE - It’s not your grandfather’s form of mining, but a Bitcoin mining operation expected to set up in Butte will be doing a form of mining in the digital realm.

“Although instead of physically digging in the ground, you’re mathematically or computationally digging into this algorithm, this very complex formula. And if you’re able to do that, by finding this solution number, then you get reward with a Bitcoin,” said Science and Technology professor at Montana Tech Pat Munday.

A Bitcoin operation known as CryptoWatt has bought the 53-acre MSE Technologies lot south of Butte to set up a string of computers to gather these Bitcoins. It’s a form of money used only in the digital world. But it’s difficult to put a value on this form of money.

“They fluctuate enormously because they’re not just a currency, they’re also a commodity,” Munday said.

To understand the concept of Bitcoin mining, imagine tens of thousands of computer hard drives working 24 hours a day, every day, to solve a complex math problem. Once they solve the problem, they get rewarded a Bitcoin, so the harder these computers work, the more Bitcoin they mine.

“It only takes a few technicians in each of these huge steel building to maintain those 20,000 computers,” Munday said.

Company officials expect to add about 50 jobs to the Butte site. And while the future of this new industry is difficult to predict, Pat Munday said he expect Bitcoin will stay in Butte for a while.

“Once you invest in the computers, and once you invest in all the facilities to operate them and cooling equipment and the trained technicians, you’re not likely to pick up and move very easily,” he said.

Bitcoin has a cap of 21 million coins to be mined, which means it can last until about 2140. The company in Butte is expected to begin operating by March.  

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