New York State Mine Catches Fire, Bit Digital Takes Thousands of Mining Machines Offline, Hashrate Drops by Nearly 50%

The mining facility Blockfusion, located in Niagara Falls City, New York, experienced an explosion and fire, causing thousands of mining machines to disconnect. The mining machines were hosted by the publicly listed mining company Bit Digital through Blockfusion. The cause of the fire was attributed to the power generation equipment, and both mining companies will seek compensation together.

Bit Digital Hash Rate Drops to 46.8%

Bit Digital announced that its hosting partner, Blockfusion's mining facility in Niagara Falls, was damaged due to a transformer explosion and subsequent fire, affecting approximately 2,515 Bitcoin mining machines and 710 ETH mining machines due to power outages.

The mining machines themselves were not damaged, and the explosion and fire are considered by the mining company to be caused by a malfunction in the power company's equipment. Bit Digital plans to jointly seek compensation with Blockfusion, including for lost mining revenue due to the power outage, and expects to resume operations within weeks.

Meanwhile, another hosting partner of Bit Digital, Digihost, had around 1,580 mining machines disconnected due to a power outage in Tonawanda, with the reason cited as "additional approvals required from authorities for the power needed."

These two unexpected events have caused Bit Digital's total hash rate to drop to 46.8%, with a severe negative impact expected on its second-quarter performance.

Plans for Mining Area Reorganization

Mayor Robert Restaino of Niagara Falls stated in an interview with CoinDesk:

We are planning new regulations to establish new zoning plans to ensure that mining facilities are not too close to residential areas. Our biggest concern is whether such mining facilities comply with regulations, especially in terms of power permits, which many mining facilities have not done.

At the end of April, the U.S. Energy Commission attempted to advance the A.7389C / S.6486D bill, proposing a three-year moratorium on mining facilities using fossil fuel power plants, requiring mining operations to be conducted with 100% green energy and submit a complete environmental impact assessment report.

The bill still needs to be reviewed by the state senate, and on May 19, the Blockchain Association once again called on all sectors to protest to the New York State Senate to keep hundreds of job opportunities as new leaders in New York.