Bitcoin-Powered Bathhouse: A Glimpse into the Future of Energy in Brooklyn

Underlying the goings-on of a conventional bathhouse in Brooklyn is a mind-blowing scenario: Instead of the usual techniques, the 104-degree heated pools are now heated by computer devices engaged in the mining of bitcoin. Seeking an efficient usage of energy, bitcoin miners have appeared in unusual spaces such as Jason Goodman’s bathhouse in New York. The baths’ heating costs have not changed drastically compared to before when the crypto-miners were installed; however, now the added benefit is the ability to earn bitcoin. Goodman acknowledges that traditional bathhouses assisted him through tough times after he relocated to NYC, and this led to his launching of the bathhouse in 2019. His goal was to re-create the impactful experiences he had encountered for serious lovers of saunas who aim to optimize their performance, longevity, and overall well-being. Then a unique concept of making things better dawned on him. Conveying his thoughts, Goodman said, “Bitcoin mining is really important. Bitcoin mining produces heat as a byproduct. I buy energy to create heat. That’s interesting.” The computers employed for bitcoin mining are submerged in a specially engineered liquid, which absorbs heat rather than conducting electric current. Subsequently, a heat exchanger helps move the produced heat into hot water that directly supplies the pools. He explained, “I was able to make hot water very easily.” Bitcoin mining was not designed for heating up hot tubs. It was designed for facilitating a new kind of digital currency where the supply is beyond any single entity’s control. The central bank can’t produce new ones; only computers, globally, mining the bitcoin protocol can generate them. These computers compete to solve a cryptographic puzzle, which the protocol makes challenging enough to ensure a solution is arrived at approximately every 10 minutes. Once the puzzle is solved, a block of transactions is validated and added to the blockchain, and bitcoin is earned. The computing power one possesses directly influences the probability of earning bitcoin. However, greater computing power equals more energy usage. “Bitcoin miners are in a relentless, unquenchable search across the globe for the cheapest possible energy,” explained Alex Gladstein, chief strategy officer at the Human Rights Foundation and author of Check Your Financial Privilege. Goodman expressed his desire to repurpose hotel, residential, and office buildings to utilize a system similar to the one he uses and become part of a distributed and hard-to-control mining network. The essence of making the process decentralized and hard to control is central for bitcoin enthusiasts. Caitlin Long, founder of Custodia Bank, mentioned that the primary goal of bitcoin is to establish a truthful ledger for people to store value that is beyond manipulation. Bitcoin is not confined by borders and is designed to benefit from inefficiency wherever and whenever it is found. One example is the welcoming of CleanSpark, a major bitcoin mining business, by Mayor Bill DeGolian in Washington, resulting in the city receiving a significant amount of monthly utility power sales. A similar approach to cooling as that used by Jason Goodman in his bathhouse is being employed by CleanSpark at their 87,000-square-foot facility in Norcross to power 4,300 bitcoin miners. The method saves costs on air conditioning for the rooms housing the computers, which are cooled using the immersion cooling method. For a number of individuals, bitcoin is seen as the real Green New Deal. According to Gladstein, bitcoin provides financial backing for renewable energy by making projects profitable through direct energy monetization rather than issuing public debt. Still, some critics find the energy directed at mining to be an outright waste. Several countries have banned bitcoin mining, and the Biden administration is considering imposing heavy taxes on it. Even Goodman faced a backlash when he announced his use of bitcoin mining to heat his bathhouse. Bitcoin miners argue that their ability to take in and release energy at short notice enhances grid reliability, which is why utilities are willing to engage with them. Texas-based bitcoin miner Marshall Long acknowledged that miners are good for the grid due to their capacity to intelligently manage power usage. CleanSpark, for instance, constantly monitors energy prices on a minute-by-minute basis and adjusts its operation to maintain profitability and assist the grid. In places like Venezuela, where the government subsidized energy costs have resulted in a bitcoin mining boom, the miners are now engaging in taking care of the electrical infrastructure that the government had neglected. This decentralized system has enriched the lives of too many for the most powerful governments to stop it in its tracks. The challenge for America is not about whether to allow mining to exist, but about whether to embrace it as part of an active market economy. It can effectively propel new energy solutions, thus enabling its by-products to generate economic value.