As Bitcoin boom falters, the crypto mining bust hits coal country and parts of the Red River Gorge

In 2021, Bitcoin mining was heralded as the economic savior of eastern Kentucky’s coal country. Now, many facilities have shut down or scaled back, leaving residents uncertain and local leaders exploring a shift toward AI-powered data centers, according to a new report by WIRED. This includes the cypto mine in Campton, Kentucky that is part of the Red River Gorge.

Anna Whites, a lawyer who represented several crypto mining ventures, says many operations lacked sustainable business models. Companies often set up quickly, leased property, and then abruptly shut down, leaving behind unpaid bills and empty promises.

Mohawk Energy, co-founded by Kentucky State Senator Brandon Smith, was supposed to be different. In 2022, Mohawk purchased a sprawling 41,000-square-foot site in Jenkins, Ky., leasing much of the space to a Chinese crypto mining firm. The facility also aimed to train former coal miners and veterans to repair electronics and maintain Bitcoin mining rigs.

At its peak, Kentucky accounted for about 20% of the United States’ computing power dedicated to Bitcoin mining. Facilities cropped up rapidly across the region, filling abandoned coal mines and promising jobs and renewal. But just as quickly, the industry’s growth has stalled.

Initially, the venture seemed successful. Twenty-eight families found stable employment, with others securing nearby jobs. But within 18 months, the partnership soured. The Chinese partner sued Mohawk over alleged contract breaches; Mohawk countersued, and profits that were meant to fund local training never materialized.

Now, those who briefly enjoyed employment find themselves unemployed once again.

Colby Kirk, who heads the nonprofit One East Kentucky, said the region is cautiously shifting its hopes toward attracting artificial intelligence data centers. At a recent economic development conference, officials debated whether Kentucky’s existing infrastructure, such as electrical substations and skilled welders, could attract these centers.

But some locals remain skeptical, reflecting a deeper mistrust from years of environmental and economic setbacks. Nina McCoy, a former high school biology teacher in Inez, cited past environmental disasters from coal mining, expressing concern that new industries—whether cryptocurrency or AI—might exploit the region again.

“We bow down to them and let them tell us what they are going to do to our community because they are job creators,” McCoy said. “They’re not job creators, they’re profit makers.”

Meanwhile, some locals see AI as a promising alternative. Wes Hamilton, a local entrepreneur who lost money in previous crypto investments, said AI data centers could offer more stable, long-term benefits. Unlike Bitcoin mining, which primarily enriches facility owners, AI could attract broader investments, permanent employment, and skilled workers to eastern Kentucky.

Even as the Bitcoin mining industry faces turbulence, Kentucky Governor Andy Beshear recently signed a “Bitcoin Rights” bill, solidifying the state’s stance as crypto-friendly. Despite this legislative support, the industry’s future remains uncertain.

Whites said Mohawk and its Chinese partner will attempt arbitration later this month. She’s hopeful they’ll find a resolution. “Mighty nice plant you have there,” she imagined them saying. “Let’s just go ahead and turn it on.”

Yet, for now, in Campton and across eastern Kentucky, many crypto mines sit quiet, waiting for whatever economic wave might come next.



Info via Paul Oliva - The Lexington Times