How the rumble of a crypto mine woke up this Blue Ridge Mountain town | CNN


Murphy, North Carolina
CNN

When Judy Stines first heard about cryptocurrencies, “I always thought it was smoke and mirrors,” she said. “But if that’s what you want to invest in, you do it.”

But then he heard the sound of crypto, a noise that neighbor Mike Lugiewicz describes as “a little jet that never leaves” and his ambivalence turned into activism. The ruckus was coming from lots and lots of computer servers and cooling fans, mysteriously set up on a few acres of open ground on Harshaw Road.

Once they turned on and the noise began bouncing around their Blue Ridge Mountain homes, sound meters in Lugiewicz’s yard showed readings of 55 to 85 decibels depending on the weather, but more disturbing than the volume is the fact that the noise never stopped.

“There’s a racetrack three miles here,” Lugiewicz said, pointing away from the cryptocurrency mine next door. “You can hear the cars going. That’s great!” “But at least they stop,” Stines chimed in, “and you can go to bed!”

The word “mine” conjures up spikes and coal dust in this region, so at first the residents of Murphy, North Carolina had no idea that mining a crypto currency called “proof of work” is more like playing a computer game with billion sided dice. Instead of shovels, modern miners need massive amounts of server power to get the winning number faster than their competitors around the world.

This relentless demand for electricity was one reason China banned cryptocurrencies, sparking a virtual gold rush from the Appalachians to the Finger Lakes in New York. Crypto miners began betting in places where energy is cheap and affordable, and if there are regulations on land use or noise, enforcement is weak. The mine at Murphy is just one of a dozen in Kentucky, Tennessee and North Carolina owned by a San Francisco-based company called PrimeBlock, which recently announced $300 million in equity financing and plans to scale up and go public.

But a year and a half after cryptocurrency found its way into this ruby ​​red pocket of Republican retirees and Libertarian veterans, anger over the mine helped shift the balance of local power and forced the Board of Commissioners to officially petition their state officials and federal that “introduce and defend legislation through the US Congress that would prohibit and/or regulate crypto mining operations in the United States of America”.

“Personally, I think if we can get a bill into the system, other (North Carolina) counties will join in,” newly elected Chairman Cal Stiles said after reading the motion. As it made it 5-0, the crowd cheered.

“Wow, they loved us so much a year ago,” PrimeBlock co-owner Chandler Song responded via LinkedIn DM when asked about the move to ban his cryptocurrency mine. “It’s unconstitutional, to say the least.”

In 2019, Song and his co-founder Ryan Fang made the Forbes “Big Money” 30 under 30 list, which features young entrepreneurs with more than $10 million in funds. According to the profile, they founded their first blockchain company, ANKR Network, in 2017 when they were in their early 20s.

ANKR eventually folded into umbrella company PrimeBlock, and in the last quarter of 2021, they claimed “$24.4 million in revenue and over 110 megawatts of installed data center capacity.” This came about when Song and Fang partnered with former Goldman Sachs investment banker Gaurav Budhrani to create a company with an “estimated enterprise value of $1.25 billion” in hopes of selling public shares on the Nasdaq.

A crypto mine is found in a field along a country road in Murphy, North Carolina.

A few weeks after that announcement, residents packed the Cherokee County Board meeting where company representatives were scheduled, but soon learned that management had changed their minds after a power outage at another town site. close crypto.

“When (the blackout) was investigated, it was discovered that the blackout occurred because someone shot, with a gun, at one of the (service lines),” County Commission Chairman Dan Eichenbaum told the room between wailing. “As a result of that, the crypto mining people decided they weren’t coming.” “They could have joined by video!” a resident told the board in frustration after the employee read the company’s statement explaining that they canceled “for the safety of the employees.”

Months later, Song told The Washington Post that he had received no noise complaints from Cherokee County and said he would build soundproofing walls and install quieter water-based cooling systems. But after erecting walls on just two sides of the mine, construction came to a halt and the dashed hopes of the community only fueled more local anger as they headed to the polls.

An aerial view of Murphy, North Carolina.

“I’m old. I’m an old person. Social media isn’t really in my jurisdiction,” Stines said as she explained how noise pollution turned her into an activist. “I like being behind the scenes and I like serving cake. But I knew that we needed to win an election.”

Chandler Song fell silent when presented with follow-up questions on LinkedIn, but the mine on Hershaw Road continues to roar as the Cherokee County attorney looks for ways to put legal force on a newly passed law against continuous noise without riling up loving landlords of freedom.

“The Tennessee Valley Authority is not looking for cryptocurrency mines and it is not one of our target markets,” Scott Fiedler, a TVA spokesman, told CNN. But he acknowledged that the federally owned utility that serves millions in seven states doesn’t keep track of mines that use TVA power, and it’s up to local utilities like the Murphy Electric Power Board to decide who gets the service and who is cut off in a blackout.

Ron Wright said that when the power went out this winter, the cryptocurrency mine remained online.

That latest contingency brought even more bad blood and loss of confidence during the brutal winter storm that gripped much of the South and forced some of the first blackouts in TVA history. As the residents plunged into the cold darkness, they say the power-hungry mine kept humming.

“They shut us down on Christmas Eve and Christmas Day every hour for anywhere from 15 to 45 minutes to an hour,” resident Ron Wright told CNN. “Well, once the power goes out, the heat pumps shut down and the pipes freeze. But less than a mile away is crypto, which can work on the low end. As soon as the power came back on, boom! They are starting before us.” Requests for comment from the Murphy Electric Power Board were not returned.

Back on Harshaw Road, Mike Lugiewicz pointed to the For Sale sign in front of his house. “September 2021, I think, is when they turned this on and my wife and I just shook our heads and said, ‘No, we’re out of here.'” He hopes to stay in the area and continue fighting alongside the neighbors. like Judy Stines until silence returns.

“I really don’t care what people invest in,” Stines said with a sigh. “I care about this noise that affects us every day, all day, all night. It’s endless.

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