Ralph Lewis, an electrical engineer and technological innovator, has an idea that may be worth millions.

Lewis is patenting a process that would solve two seemingly unrelated problems — power plants operating at reduced capacity and the incredible amount of electricity it requires to mine Bitcoin and other forms of cryptocurrency.

His process involves filling a 20-foot-by-8-foot shipping container with computer servers, connecting it to power and internet, and placing the container near a power plant that’s running at less than full capacity.

Now it’s time to put his idea to the test.

After raising $1 million from international investors, Lewis has assembled a small team of engineers and built his first container computer. Last week, the Lockport Industrial Development Agency approved a lease agreement allowing Lewis’ company, Drone Energy, to operate one container for $500 a month at the IDA Park South.

The container will harness energy from the Lockport Cogeneration Facility, a natural gas power plant that has become underutilized after years of downsizing at the General Motors plant, Lewis said.

“There’s a lot of time the plant is totally off, and when it’s on it’s not running at peak capacity,” Lewis said. “Their assets are not at full operational capacity. If your power plant is not on, you’re not making money.”

By placing servers in a container, Drone Energy will be able to take advantage of low-cost power at other plants that are running below full capacity.

“We came up with concept of creating these modular, shipping container-sized computers that could be adjacent to the power source,” Lewis said.

Drone Energy will use those computers to mine Bitcoin and a few other popular forms of decentralized, digital cryptocurrencies. Bitcoin and other cryptocurrencies rely on blockchain, digital ledger where bitcoin transactions are recorded publicly and chronologically.

Lewis explained that computers “race” to be the first to process and verify transactions through blockchain, and that millions of computers around the world are involved in the mining process. Computers that are the first to verify a transaction are rewarded (or rather, their owners are) with an amount of bitcoin currency.

Cryptocurrencies have entered the mainstream conscious in recent months, after the value of bitcoin skyrocketed to nearly $20,000 in December. By early February, it was down to about $8,700.

Meanwhile, thousands of forms of cryptocurrency have emerged in recent years, with some celebrities (particularly hip-hop artists) launching their own currencies.

Critics and some regulators have raised concern about widespread fraud among some cryptocurrency companies, and say many legitimate currencies are destined to fail.

Lewis said Drone Energy will only mine the most popular and clearly legitimate forms of cryptocurrency — Bitcoin, Lite Coin and Ethereum. But mining cryptocurrency is only the start. 

“(Mining Bitcoin is) the entry point. It’s not the grand vision,” Lewis said. “What else can we do? We can train artificial intelligence networks, we can do machine learning, we can host supercomputers that are doing weather simulations. We can do launch-distributed search activities.”

Lewis, a Town of Lockport native, got his idea for Drone Energy while working as the chief technology officer for Heads Up Technology, a Buffalo-based technology manufacturer.

Lewis received his bachelor’s degree in electrical engineering from the University of Pittsburgh in 2009, and spent the next six years working for various companies in the Los Angeles area.

After returning to Western New York in late 2015, Lewis took a position with Heads Up Technology, where he focused on developing a monitoring device that clips on to laborers’ hardhats. The device would monitor levels of heat, noise, pressure and other environmental changes to detect potential hazards.

“We were creating something to essentially monitor the environment of workers,” Lewis said.

Last year, the company was accepted into a prestigious, three-month hardware accelerator program in San Francisco. But after arriving in the Golden Gate City, Lewis found that program attendees and other tech professionals were more interested in blockchain than anything.

“Almost all people cared about was blockchain,” Lewis said. “It was just the buzz around Silicon Valley — blockchain, blockchain, blockchain.”

Lewis returned to WNY with ideas to incorporate blockchain into the company’s products. But others at Heads Up Display showed little interest in the idea.

“We just want to sell widgets. We don’t even need an internet backbone; we just want to build things that people can put on their heads,” Lewis said of the company’s mentality.

Still, the concept of incorporating blockchain into heavy industry stuck with Lewis.

Then, sometime last August, Lewis began thinking about how to take advantage of underutilized power plants. He learned these issues while involved in a cooperative educational program with Emerson Electric Company during his time at the University of Pittsburgh.

“(I thought), ‘What if we could do blockchains processing at a power plant because it uses a ton of electricity?” he said.

Lewis took his idea to the Thomas R. Beecher Jr. Innovation Center at 43 North in Buffalo, where a group of technology professionals meet weekly. His idea was a hit.

“I was kind of shocked that for the next two hours, the group at the meet-up only talked about my start-up-idea,” Lewis said. “So I thought, ‘Well, there’s definitely something here.’ ”

So Lewis patented the process — a patent that’s now pending — and began soliciting investors.

After dozens of presentations and conferences calls to investors from California to Ohio to the United Kingdom, Lewis had gathered $1 million to build his first container.

His venture is structured like an oil and gas exploration company, in which one partner owns the infrastructure and the other operates it.

The general partner, Drone Energy, is responsible for managing the container and the business, and received about $153,000 of the start-up capitol.

The limited partner, COIN Drone One, is charged with creating the infrastructure, and received the lion’s share of the startup funds.

In the future, more limited partners could join Drone Energy, and each could manage one to dozens of containers.

The COIN Drone One container is currently being manufactured at John W. Danforth Company in Tonawanda. Lewis hopes to have the container installed by June 1.

It will utilize half of a megawatt of power at the cogeneration plant for at least the next month as Lewis’s idea is put to the test. If it works well, the container will be relocated to a private oil and gas field in Illinois, and Lewis will begin fundraising for COIN Drone Two, which will include 20 containers and require $80 million.

“We’re going to prove that this technology works and that we can scale it, and we’re going do it in the backyard of the power plant,” Lewis said.

Lewis hopes that one day his idea will join the air conditioner, fire hydrant and pace-maker in the ever-growing list of Buffalo-bred technological innovations.

“This is truly a Lockport/Western New York product,” Lewis said. “It’s something the community can be very proud of.”


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