Blockware Solutions Builds 20MW Bitcoin Mining Data Center in Kentucky

Blockware Solutions, the privately held crypto mining and infrastructure company, has built a 20 megawatt (MW) mining facility in Belfry, Kentucky, the first of three planned sites in the region.

The data center will allow customers to co-locate their mining rigs and has been testing with select clients since January, according to a statement. The facility’s power capacity could also be expanded to as much as 75MW.

“The new 20-Megawatt data center will facilitate professional mining that will give individual customers total control over their own mining activities,” the company said in the statement.

Blockware Solutions CEO and co-founder Mason Jappa said a primary reason for Blockware to start its mining operation in Kentucky is the state’s pro-crypto mining stance.

“Kentucky was the first state, in my opinion, in the United States to pass a House and Senate bill that actually incentivized bitcoin miners with tax and other initiatives,” Jappa said.

Kentucky had about 12.4% of bitcoin mining hashrate, the second highest after Georgia’s 34.2%, according to a March 2 tweet from Foundry USA Pool’s U.S.-based hashrate. Foundry is a subsidiary of Digital Currency Group, which is the parent company of CoinDesk.

Kentucky also boasts low cost power and sustainable energy sources as well as a good climate for mining operations, Jappa said.

Blockware doesn’t provide its power costs but according to the Global Energy Institute, in 2020 average retail electricity price in the state was $0.0856, compared to $0.0858 in Texas and $0.149 in New York.

Blockware’s data center is located on the Eastern Kentucky and Western Virginia border, where its mountainous climate is cooler, said Jappa. A colder climate, as seen in places like Canada, Norway and Sweden, helps with the air cooling of the mining rigs, without requiring additional costs for temperature management.

Blockware has deployed mining computers including Bitmain’s S19s and WhatsMiner M30S++ at the new site. Future batches of S19 XPs planned for later in the year, Jappa said.

Blockware is repurposing old manufacturing and coal plants in Belfry and using them for bitcoin mining, while providing jobs for the communities, according to Jappa.

Blockware, however, is not using coal energy to power the new data center, rather, the power is coming from the grid, which uses about 65% sustainable energy, according to Jappa. This puts Blockware above the 58.5% sustainable energy mix the miners globally are now utilizing, according to the Bitcoin Mining Council’s estimate.

“It is my hope that a region known for mining coal will now benefit from this different type of mining,” Kentucky State Representative Angie Hatton said in the statement. “It means a lot to see Blockware Solutions invest here and create these jobs, and I also hope that its significant electricity needs will help stabilize our steep residential rates,” Hatton added.