“Carbon neutral” Bitcoin operation founded by coal plant operator wasn’t actually carbon neutral
Score one for Hunterbrook Media.
I’m at DEFCON! TODAY (Aug 9), I’m emceeing the EFF Poker Tournament (noon at the Horseshoe Poker Room), and appearing on the Bricked and Abandoned panel (5PM, LVCC — L1 — HW1–11–01). TOMORROW (Aug 10), I’m giving a keynote called “Disenshittify or die! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses’ insatiable horniness for enshittification” (noon, LVCC — L1 — HW1–11–01).
Water is wet, and a Bitcoin thing turned out to be a scam. Why am I writing about a Bitcoin scam? Two reasons:
I. It’s also a climate scam; and
II. The journalists who uncovered it have a unique business-model.
Here’s the scam. Terawulf is a publicly traded company that purports to do “green” Bitcoin mining. Now, cryptocurrency mining is one of the most gratuitously climate-wrecking activities we have. Mining Bitcoin is an environmental crime on par with opening a brunch place that only serves Spotted Owl omelets.
Despite Terawulf’s claim to be carbon-neutral, it is not. It plugs into the NY power grid and sucks up farcical quantities of energy produced from fossil fuel sources. The company doesn’t buy even buy carbon credits (carbon credits are a scam, but buying carbon credits would at least make its crimes nonfraudulent):
https://pluralistic.net/2023/10/31/carbon-upsets/#big-tradeoff
Terawulf is a scam from top to bottom. Its NY state permit application promises not to pursue cryptocurrency mining, a thing it was actively trumpeting its plan to do even as it filed that application.
The company has its roots in the very dirtiest kinds of Bitcoin mining. Its top execs (including CEO Paul Prager) were involved with Beowulf Energy LLC, a company that convinced struggling coal plant operators to keep operating in order to fuel Bitcoin mining rigs. There’s evidence that top execs at Terawulf, the “carbon neutral” Bitcoin mining op, are also running Beowulf, the coal Bitcoin mining op.
This is a very profitable scam. Prager owns a “small village” in Maryland, with more that 20 structures, including a private gas station for his Ferrari collection (he also has a five bedroom place on Fifth Ave). More than a third of Terawulf’s earnings were funneled to Beowulf. Terawulf also leases its facilities from a company that Prager owns 99.9% of, and Terawulf has *showered * that company in its stock.
So here we are, a typical Bitcoin story: scammers lying like hell, wrecking the planet, and getting indecently rich. The guy’s even spending his money like an asshole. So far, so normal.
But what’s interesting about this story is where it came from: Hunterbrook Media, an investigative news outlet that’s funded by a short seller — an investment firm that makes bets that companies’ share prices are likely to decline. They stand to make a ton of money if the journalists they hire find fraud in the companies they investigate:
It’s an amazing source of class disunity among the investment class:
https://pluralistic.net/2024/04/08/money-talks/#bullshit-walks
As the icing on the cake, Prager and Terawulf are pivoting to AI training. Because of course they are.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
