Adam Weitsman, scrap metal dealer, restaurateur, philanthropist, social media star, is adding a new gig – cryptocurrency miner.
The millionaire owner of Upstate Shredding said he plans to launch a cryptocurrency mining farm next to his scrap yard in Owego in November.
For Weitsman and other crypto miners like him, it’s a gamble. He’s spending $20 million to buy hundreds of specialized, powerful computers that will churn constantly to solve complex mathematical equations.
The payout? Digital money in the form of bitcoin, litecoin and kadena.
The investment risk is all on Weitsman, he said. But the move toward setting up these computer farms, some of which consume loads of electricity, has drawn scrutiny from environmentalists and state lawmakers.
Weitsman’s farm will start out with 400 computers and grow to up to 2,000 within a year, he said. They will operate around the clock to generate the digital currencies that are exchanged independently of banks or governments.
Altogether, the farm will cost about $20 million to set up, including the cost of buying computers specially built for cryptocurrency mining and air-conditioned shipping container-like pods to house them, he said.
The pods, which can hold about 250 stacked computers each, will be placed on the ground instead of being set up inside a building, he said. That means they can be easily placed on trucks and relocated in the event of a disaster such as a flood or a long-term power outage. It also means Weitsman does not have to build any permanent structures or obtain municipal building permits, he said.
He said the farm will employ five people. Steve Antonacci, a computer engineer, is a minority partner in the business. Two cryptocurrency mining experts — Stephen Carpineta and Kevin Yan — will be among the employees who set up and operate the farm, he said.
Weitsman said the move into cryptocurrency mining will help him diversify his business. He said he decided to get into it after reading about it on social media and researching it.
“I feel like it’s a new-generation offshoot of my recycling business, because my recycling business is a commodity-based business that’s indirectly like mining, even though it’s not out of the ground,” he said. “So we want to diversify some, diversify the company a little more into the modern age.”
Weitsman is a busy man. In addition to running the East Coast’s largest privately held scrap metal processing business, he operates two restaurants in Skaneateles — The Krebs, and Elephant and the Dove. He also recently began giving away $1 million to local charities. And he frequently posts photos of his travels and meetups with celebrities on his Instagram account, which has 10.3 million followers. (He was named a top 10 Instagram influencer in 2020.)
Cryptocurrency mining comes with risks, among them the price volatility of the currencies. But Weitsman said that does not concern him. Price volatility is also a risk of the metal recycling business, so it’s something to which he is accustomed, he said.
Crypto mining operations like the one Weitsman is planning have come under criticism from environmentalists because of the large amount of power they require.
One of the critics, state Assemblywoman Anna Kelles, D-Ithaca, said the plants use up limited resources, essentially gobbling power that could otherwise be used to power homes. In addition, such farms increase greenhouse emissions by the power plants that produce the electricity, and they generate massive amounts of electronic waste, she said.
“The technology changes so fast that the turnover, to stay competitive, for the computer processors is about every year and a half,” she said. “You also burn through computer processors way faster than you would a residential computer.”
Kelles introduced legislation earlier this year that would have imposed a moratorium on new or expanded cryptocurrency farms located at power plants, such as a 27,000-computer farm planned for a site near Seneca Lake in Dresden.
The moratorium, which passed the Senate but not the Assembly, would not have applied to Weitsman’s farm. However, it would have required the state to analyze the environmental impact of all cryptocurrency mining farms in the state. Kelles said she plans to introduce a similar bill again next year.
Weitsman says he has an answer to worries from people like Kelles.
He said his farm will use 4 megawatts of power continuously each hour. That’s roughly equivalent to the amount of electricity used by 1,300 homes during one hour.
To address environmental concerns and reduce his power costs, he said, he will install solar panels on the roofs of his recycling plant’s many buildings and some on the ground. The panels will provide one-quarter to one-half of the farm’s electricity needs, with New York State Electric & Gas providing the rest, he said.
“Solar is a key part of this,” he said. “One, to keep people happy in the region because of the carbon footprint. And two, economically, we want to use as much solar as we can.”