A manufacturing start-up recently announced plans to move into a shuttered aluminum factory in upstate New York, taking advantage of abundant cheap electricity from the St. Lawrence River.
Instead of smelting aluminum, however, the company plans to turn that power into Bitcoins.
Money is supposed to be a means of buying things. Now, the nation’s hottest investment is buying money. And the investment rush is raising questions about whether one reason for the slow pace of economic growth in recent years is that the nation is busy distracting itself. While Bitcoin mining may not be labor intensive, it diverts time, energy and capital from other, more productive activities that economists say could fuel faster growth.
“It appears that much of our evolving digital infrastructure is devoted to activities, like the proliferation of cybercoins, that are worse than frivolous,” said James McAndrews, the former head of research at the Federal Reserve Bank of New York.