Inside the Rise of Bitcoin-Powered Pools and Bathhouses

The scene inside Bathhouse, a spa in Manhattan, is one of complete serenity. Visitors recline in 105-degree pools, surrounded by cedar tiles and elegant marble slabs from Brazil. But just beyond closed doors, in harshly-lit back rooms, an unexpected source helps forge the bliss: rows and rows of continuously-running Bitcoin mining computers.

The idea of a Bitcoin mine heating a pool sounds strange. The machines run constantly to find new Bitcoin and safeguard the Bitcoin network. The heat they generate from their activity is extracted via pipes, and powers the Bathhouse’s heated pools and marble stones. Co-owner Jason Goodman says the technique allows him to warm his pools more efficiently than traditional methods, while also accruing a stockpile of Bitcoin he hopes will increase in value going forward. 

Around the world, a handful of establishments are turning to the same methods in an attempt to harness energy from intensive computing for greater societal use, including to heat a town in Finland and an Olympic pool in Paris. But while proponents argue that these solutions could lower local energy costs and reduce electricity and water usage, some environmentalists worry these small-scale methods obscure much bigger problems. Data centers use a massive and increasing amount of energy, with many of them powered by fossil fuels—and most of their heat waste isn’t being channeled into productive uses at all. 

“Heating a swimming pool with wasted data center energy on its face is a good idea, but it sort of looks like using a gas-guzzling Hummer’s radiator as a panini press,” Jeremy Fisher, Sierra Club’s principal advisor on climate and energy, wrote to TIME. “Maybe it's clever, but it doesn’t really address the core issue that we need to power our economy with clean energy in order to avoid the climate crisis.”

Bitcoin at the Bathhouse

Bathhouse started operating in Brooklyn in 2019, offering heated pools, cold plunges and saunas to New Yorkers hoping to relax. Initially, co-owners Goodman and Travis Talmadge heated their pools with electric heaters, which were the cheapest option, Goodman says. “But they’re real electric pigs: you’re adding energy to the water at all times by just sucking power out of the wall,” he says. “Typically, the cheapest way to do something is probably the least energy conservative.” 

The pair then came across the YouTube page of a Bitcoin miner who heated his backyard pool with a Bitcoin mining operation. Miners run complex equations on computers in order to find new Bitcoin, and this manic activity generates a massive amount of heat that needs to be cooled to stop from overheating, often with fans. But a scant few miners around the country were instead capturing the heat from the computers via a heat exchanger and a pump, and then channeling it toward keeping their pools warm.

Goodman and Talmadge were inspired to attempt the same method. Bathhouse now has 12 ASIC computers (a type of computer specializing in mining) running in Brooklyn and 20 ASICs in Manhattan, for a total of 5200 terahash (less than 1/100th the power of many industrial size Bitcoin mining rigs). The company is also currently planning an expansion that would triple the size of the Bitcoin operation at the Brooklyn location. 

Read More: Inside the Health Crisis of a Texas Bitcoin Town

Goodman says that Bathhouse’s electricity bills are more or less the same as before: around $20,000 a month in Brooklyn and $40,000 in Manhattan. Their Bitcoin initiative also came with the hefty upfront costs of buying ASICs and other equipment. But Goodman says that their mining operation is more energy efficient than electric heaters and earned the company 1.5 Bitcoin last year: about $90,000 in today’s prices. Goodman plans to hold onto the Bitcoin they earn rather than using it to pay for operating expenses, betting that its price will increase in the long run.

“If the price of Bitcoin tanked and went to zero, and then we would have a bunch of equipment that would be really pointless, and we would definitely be rethinking what we're doing,” he says. “We are doing it because the economics makes sense in today's world.” 

Goodman’s commitment to Bitcoin is evident from the moment one walks into the Manhattan location: copies of the book “The Bitcoin Standard” by the anonymous author Saifedean Ammous sit on a central shelf in the lobby, flanked by soaps and bathrobes. Polls show that Bitcoin remains unpopular among large swaths of the American population, but Goodman says the backlash they’ve received has been minimal. “We’ve had a few detractors, but the vast majority of our customers don’t don’t care either way. They don’t sit in a pool and wonder how it’s heated,” he says. 

Goodman also stresses that the point of the mining rigs isn’t to maximize profitability. In fact, the miners go to sleep whenever the pools reach their desired temperature, which means that Goodman is theoretically leaving Bitcoin on the table. “Bitcoin mining is not really the Business I want to be in,” he says. “We’re doing it as an efficiency move. We’re trying to have the happiest customers and the most awesome tech.” 

Other pools powered by data centers

A massive, global boom in data centers has taken place recently, brought on in part by the rise of Bitcoin mining and the explosion of the AI industry. Environmentalists worry that this rise could bring countless negative effects: energy costs for consumers will increase; more fossil fuels will be burned; and climate goals will be cast to the wayside. 

Read More: How AI Is Fueling a Boom in Data Centers and Energy Demand

In response, some data center industry players have been working to channel the heat from their operations into more productive uses. In Paris, a data center is turning its hot air waste into water and piping into a local energy system, routing to buildings including the Olympic Aquatics Center. The mayor of the Paris suburb Seine-Saint-Denis claims that using the data center as an energy source will spare the region 1,800 metric tons of CO2 emissions per year. 

A British startup, Deep Green, has also been working to provide data centers to hundreds of pools, which were previously heated with water boilers. The startup has advertised that they can install cyclical systems in which cold water from pools is used to cool servers, which heat up and then send that energy back to the pool. “Our data centers are highly energy efficient and support local communities with free heat,” Deep Green’s founder and CEO Mark Bjornsgaard told The Next Web earlier this year. 

Industry players and government officials hope that these sorts of solutions could scale upwards, and help the European Union meet ambitious environmental targets, including reducing emissions by 55% by 2030.

Projects capturing and reusing heat for homes, offices or universities have sprung up across the region. But data-center heat redistribution remains a niche market, with companies facing costs and challenges in distributing the heat. 

Fisher, of the Sierra Club, likened these efforts to greenwashing, a practice in which companies make deceptive claims to appear more environmentally friendly to consumers. “Rather than heating swimming pools, what we really need is transparency in an industry that has a growing impact on the electric grid, the environment, and public Health,” he wrote. 

And Sasha Luccioni, an AI researcher and climate lead at the AI platform Hugging Face, says that while these types of solutions could have a positive impact, “they feel like trying to mitigate the downstream aspects instead of making AI less research intensive.” 

“These initiatives are definitely good, but to what extent is it going to be something that’s fast or big enough to make a difference?”

Andrew Chow is the author of Cryptomania, a book about the rise and fall of Sam Bankman-Fried and Cryptocurrency during the pandemic.