The roar of mining machines fades away, marking the end of Kentucky's Bitcoin boom
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The roar of mining machines fades away, marking the end of Kentucky's Bitcoin boom
At its peak, Kentucky contributed about 20% of the total proof-of-work cryptocurrency mining hash rate in the United States.
Navigating Web3 tides with focused insightsBy: Dina Temple-Raston
Translated by: Luffy, Foresight News
If you drive to the outskirts of tiny Compton, a town with fewer than 400 residents, you'll hear a low hum emanating from the woods—the constant drone of cryptocurrency mining equipment. As you approach, the source comes into view: clusters of low-rise metal buildings resembling shipping containers arranged in a semicircle, their fans and processors buzzing rhythmically. The site is ringed with chain-link fencing and surveillance cameras, and two security guards sit in a pickup truck outside the perimeter.
These metal containers blanket the hillsides, built precisely atop the remnants of old coal mines. Inside, specialized computers run at full capacity, racing to solve complex mathematical puzzles—using computational power to validate Bitcoin transactions and earning tiny fractions of Bitcoin as rewards.
For a brief period in 2021, this region seemed to be experiencing a new kind of boom, stamped everywhere with the mark of Bitcoin. At its peak, Kentucky contributed approximately 20% of the total proof-of-work cryptocurrency mining capacity in the United States.
But here, booms and busts follow familiar patterns. Local officials say that due to Kentucky’s lax regulations and widespread lack of industry transparency, it's difficult to determine exactly how many crypto mining operations remain active in eastern Kentucky. But locals know one thing for sure: the mining frenzy has already begun to fade.
"They either set up mines on someone else’s land or pay local companies for space," said attorney Anna Whites, who has represented several crypto mining clients. "They pay an initial fee, or convince the landowner to cover it, then operate for about three months—just long enough to get close to the next billing cycle—before vanishing without a trace."
In early 2022, when Mohawk Energy launched a crypto mining project in Jenkins, Kentucky, local officials said this time would be different. Co-founded by Kentucky State Senator Brandon Smith, Mohawk Energy purchased a massive 41,000-square-foot building along with eight surrounding acres. The company leased most of the space to a Chinese cryptocurrency mining firm, while reserving other areas for classrooms and hands-on training centers designed to teach locals how to repair iPads, maintain Bitcoin miners, and develop digital economy skills. It was a big deal for Jenkins: local public television covered the launch, showing toolboxes, workers, and smiling government officials.
"Mohawk’s plan was to hire retired coal miners and disabled veterans returning to eastern Kentucky who couldn’t find work, and train them," said Whites (one of whose clients was Mohawk). "Among other promises, the project offered salaries approaching six figures and pledged to reinvest part of its mining profits into training programs to sustain them. For a while, it actually worked."
Whites said that for roughly 18 months, things looked promising: 28 families saw real gains, with one member securing stable employment, and about 30 more relatives finding jobs nearby. But when asked about the current situation, she paused. "I believe most of them are unemployed again."
The collapse came abruptly. The Chinese partner sued Mohawk for breach of contract, and Mohawk countersued. The shared cryptocurrency revenues were never delivered. Today, as some Kentuckians grow disillusioned with Bitcoin mining, they’re beginning to talk about artificial intelligence data centers the way they once spoke of coal mines and hash rates—with cautious hope. They say AI could bring jobs, fiber-optic networks, and lasting development.
Colby Kirk runs a nonprofit called One East Kentucky, focused on driving economic growth in the region. He remembers the moment during Kentucky’s spring economic development conference in Paducah this past April when the conversation shifted.
"There were several site selection consultants on the panel, and they started talking about data centers," he recalled. "They mentioned the I-81 corridor in northern Pennsylvania, where there are many large-scale data centers, and asked whether our communities could prepare for such investments. One consultant responded that certain conditions would need to be met."
Those conditions turned out to be challenging: flat land, abundant electricity, fiber-optic connectivity, and a workforce skilled in wiring and welding. Coincidentally, according to One East Kentucky, the region has about twice the national average number of welders. This isn't surprising—welding is essential to keeping operations running in coal mines, where metal and pressure dominate.
The old infrastructure remains: substations, sturdy ground, cooling systems, and high-power hardware ready to be reactivated. "Maybe facilities like data centers could be part of the solution," Kirk said.
So when the panel discussion ended and the Q&A began, Kirk said he asked the question that had been weighing on his mind.
"You know, 50 or 60 years ago, a computer took up more space than my office does now, and today the phone in my pocket is more powerful than the computers that sent astronauts to the moon," he recalled asking. "Will these data centers always require buildings 30 to 40 feet high and millions of square feet in size? Or will we end up leaving behind massive warehouses—or industrial-scale junk—that we can't fully utilize?"
He said the consultant didn’t offer a satisfying answer. "That’s the problem," Kirk said. "We don’t know what the future of this technology holds."
This uncertainty unsettles Nina McCoy, a former high school biology teacher from Inez, a coal-mining town made famous in 1964 when President Lyndon Johnson used it to rally support for his “War on Poverty.”
"This might sound terrible," she said, "but if they choose to build this thing here, it means it’s trouble. We’ve lived here long enough to recognize the pattern: people dump what they don’t want in places like this."
Her skepticism stems from personal experience: in October 2000, a massive coal slurry spill upstream from Coldwater Fork contaminated the river flowing behind her home, leaving Inez residents unable to drink tap water for months.
"We downstream didn’t find out right away, but the school system had to shut down for about a week until alternative water sources were found," she said.
To this day, many Inez residents still distrust their tap water.
So when McCoy hears the hype around artificial intelligence, she hears something else: another promise that comes at a cost. "We let these people call themselves 'job creators,'" she said. "Whether it’s AI, cryptocurrency, or whatever— we bow down to them, let them dictate terms to our communities, just because they’re 'job creators.' But in truth, they aren’t job creators—they’re profit makers."
And profits always leave traces.
AI data centers consume staggering amounts of energy—a single ChatGPT query uses up to ten times more energy than a typical Google search—and generate intense heat. To stay cool, these facilities use billions of gallons of water annually, much of which evaporates. Residents are wary, having suffered before from other facilities and their wastewater discharges, fearing these new installations could harm fish, degrade land, and threaten the very things Kentuckians hope to protect.
Still, some locals see potential in AI—even a chance for progress.
"Artificial intelligence is already embedded in our lives," said local entrepreneur Wes Hamilton, who participated in crypto mining during Kentucky’s mining heyday. "Siri, ChatGPT, robots—you name it, it all runs on AI," he said. "Bitcoin is a one-time win—you create it, and only the miner profits."
Hamilton believes data centers could attract investors, engineers, and even businesses willing to settle long-term in the region. He says AI professionals from around the world could come to Kentucky. Though he admits he lost heavily on past crypto ventures, he insists this time is different.
When Bitcoin first emerged, lawmakers rolled out generous tax incentives to lure miners: companies investing over $1 million were exempt from sales taxes on hardware and electricity. In March 2025, Kentucky Governor Andy Beshear went even further, signing the "Bitcoin Bill of Rights."
Framed as legislation to "defend personal financial freedom," it aims to secure Kentuckians’ rights to use digital assets. The original draft went further, attempting to prohibit local governments from using zoning laws to restrict cryptocurrency mining—a provision opposed by environmental groups. The language was ultimately softened, but the core intent remained unchanged: in Kentucky, digital resource extraction will keep humming.
That’s why we stand outside this mining facility in Compton, staring at the semicircular array of metal structures nestled in the trees. The mine operates day and night, Sundays included. Now, with Bitcoin fluctuating around $100,000, and major miners talking about pivoting to AI, one can’t help but wonder: can Kentucky’s Bitcoin mining industry rise again?
Mohawk’s Bitcoin mining operation might even make a comeback. Anna Whites said the parties were scheduled to enter arbitration on May 12. "I’m hopeful," she told us. "I really hope they sit down and say, 'Your facility is amazing—let’s just fire it up and go.'"
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