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How the noise of a crypto mine woke this Blue Ridge Mountain town

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Murphy, North Carolina
CNN

When Judy Stines first heard about cryptocurrency, “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 she heard the sound of crypto, a noise that neighbor Mike Lugiewicz describes as “a little jet that never goes off” and his ambivalence turned into activism. The noise came from stacks and stacks of computer servers and cooling fans, mysteriously set up in a few acres of open field on Harshaw Road.

After they fired and the noise began to echo around their Blue Ridge Mountain homes, the sound meters in Lugiewicz’s backyard 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.

Mike Lugiewicz describes the noise generated by the nearby crypto mine as

“There’s a race track three miles from here,” Lugiewicz said, pointing to the crypto mine next door. “You can hear the cars running. It’s cool!” “But at least they stop,” Stines chimed in, “And you can go to bed!”

Crypto mining noise

This is the sound in front of Mike Lugiewicz’s garage.

Source: CNN

The word “mine” conjures up pickaxes and coal dust in this region, so at first, neighbors in Murphy, North Carolina had no idea that mining a cryptocurrency called “proof of work” is more like playing a game. keyboard with data from billions of sides. Instead of shovels, modern miners need huge amounts of server power to roll the winning number faster than their competitors around the world.

This relentless demand for electricity was one of the reasons China banned cryptocurrency, triggering a virtual gold rush from Appalachia to New York’s Finger Lakes. Cryptocurrency miners have started to bet on places where energy is cheap and accessible and, if there are land use or noise regulations, enforcement is weak. The Murphy mine 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 expand and open capital.

But a year and a half after cryptocurrency landed in this ruby-red pocket of retired Republicans and Life Libertarians, anger over the mine has helped shift the balance of local power and forced the Board of Commissioners to officially ask its state and federal officials to that “introduce and defend legislation through the US Congress that would prohibit and/or regulate cryptocurrency mining operations in the United States of America.”

“Personally, I think if we can get a bill into the system, other counties (in North Carolina) will join in,” said newly elected President Cal Stiles after reading the motion. When it went from 5 to 0, the crowd applauded.

“Wow, they wanted us so bad a year ago,” PrimeBlock co-owner Chandler Song responded via LinkedIn DM when asked about the move to ban his crypto mine. “It is unconstitutional, to say the least.”

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

ANKR eventually morphed into umbrella company PrimeBlock, and in the final quarter of 2021 claimed “$24.4 million in revenue and over 110 megawatts of installed data center capacity.” That came when Song and Fang teamed up with former Goldman Sachs investment banker Gaurav Budhrani to create a company with an “estimated enterprise value of $1.25 billion” with the hope of selling public stock on Nasdaq.

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

A few weeks after that announcement, residents crowded the Cherokee County Board meeting where company representatives were supposed to attend, but soon learned that management had changed its mind following a power outage at another nearby crypto site.

“When (the outage) was investigated, it was discovered that the power outage occurred because someone fired a gun at one of the (service lines),” County Commission Chairman Dan Eichenbaum told the room for groans. “As a result of that, the cryptocurrency mining people decided not to come.” “They could have joined via video!” one resident told the council in frustration after the employee read the company’s statement explaining that they canceled “for employee safety.”

Months later, Song told The Washington Post that he had not received any noise complaints from Cherokee County and said he would build soundproofing walls and install quieter water-based cooling systems. But after building walls on just two sides of the mine, construction stalled and the community’s dashed hopes only served to heighten local anger as they headed to the polls.

An aerial view of Murphy, North Carolina.

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

Chandler Song was silent when he took follow-up questions on LinkedIn, but the Hershaw Road mine roars as the Cherokee County attorney looks for ways to put legal teeth in a newly passed continuous noise law without angering nature-loving landowners. freedom.

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

Ron Wright said that when his power was cut this winter, the crypto mine remained online.

This last contingency brought even more bad blood and loss of confidence during the brutal winter storm that hit much of the South and forced some of the first blackouts in TVA history. As residents plunged into the cold darkness, they say the energy-hungry mine continued to hum.

“They shut us down on Christmas Eve and Christmas Day every hour for 15 to 45 minutes at an hour,” resident Ron Wright told CNN. “Well, once your power goes down, your heat pumps shut down and the pipes freeze. But less than a kilometer away is encryption, which can run at the lower end. As soon as the power came back, 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. “I think September 2021 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 to fight alongside neighbors like Judy Stines until silence returns.

“I don’t really 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 never-ending.”

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