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 you.”
But then she heard the sound of crypto, a noise that neighbor Mike Lugiewicz describes as “a small jet that never leaves” and her ambivalence turned into activism. The racket was coming from stacks and stacks of computer servers and cooling fans, mysteriously set up in a few acres of open farm field down on Harshaw Road.
Once they fired up and the noise started bouncing around their Blue Ridge Mountain homes, sound meters in the Lugiewicz yard showed readings from 55-85 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 out right here,” Lugiewicz said, pointing away from 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!”
The word “mine” evokes pickaxes and coal dust in this region, so at first, the neighbors around Murphy, North Carolina, had no idea that mining a so-called “proof of work” crypto coin is more like playing a computer game with billion-sided dice. Instead of shovels, modern miners need enormous amounts of server power to roll the winning number faster than their competitors around the world.
This unrelenting demand for electricity was one reason China banned cryptocurrency, touching off a virtual gold rush from Appalachia to New York’s Finger Lakes. Crypto miners began putting down stakes in places where power is cheap and affordable, and if land use or noise regulations even exist, enforcement is weak. The mine in 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 crypto came to this ruby red pocket of Republican retirees and Libertarian life-timers, anger over the mine helped flip the balance of local power and forced the Board of Commissioners to officially ask their state and federal officials to “introduce and champion legislation through the US Congress that would ban and/or regulate crypto mining operations in the United States of America.”
“I personally think that if we can get a bill into the system, other (North Carolina) counties will join,” newly elected Chairman Cal Stiles said after the motion was read. When it passed 5-0, the crowd cheered.
“Oh boy, they wanted us so bad a year ago,” PrimeBlock co-owner Chandler Song replied via LinkedIn DM when asked about the move to outlaw his crypto mine. “It is 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 over $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 was eventually folded into the umbrella company PrimeBlock and in the final quarter of 2021, they claimed “$24.4 million of revenue, and over 110 megawatts of installed data center capacity.” This came as 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 hopes of selling public stock on the Nasdaq.
A few weeks after that announcement, residents packed the Cherokee County Board meeting where representatives from the company were scheduled to appear, but soon learned that management had changed their minds after a power outage at another crypto site nearby.
“When (the outage) was investigated, it was found out that the power outage occurred because someone shot, with a gun, one of the (service lines),” County Commission Chair Dan Eichenbaum told the room to groans. “As a result of that, the crypto mining people decided they weren’t going to come.” “They could have joined over video!” one resident said to the board in frustration after the clerk read the company’s statement explaining they canceled “for employee safety.”
Months later, Song told The Washington Post that he had received no noise complaints from Cherokee County and said he would build noise insulation walls and install quieter water-based cooling systems. But after erecting walls on only two sides of the mine, construction stopped and the dashed hopes of the community only poured more fuel on local anger as they headed to the polls.
“I’m old. I’m a senior citizen. Social media is not really in my bailiwick,” Stines said as she explained how noise pollution transformed her into an activist. “I like to be behind the scenes and I like to serve pie. But I knew that we needed to win an election.”
Chandler Song went silent when presented with follow-up questions on LinkedIn, but the mine on Hershaw Road roars on as the Cherokee County attorney searches for ways to put legal teeth into a newly passed law against continuous noise without rankling liberty-loving landowners.
“The Tennessee Valley Authority does not pursue cryptocurrency mines and it is not one of our target markets,” Scott Fiedler, a spokesman for the TVA told CNN. But he acknowledged that the federally owned utility that serves millions in seven states does not keep track of the 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 in a blackout.
That last contingency brought even more bad blood and lost trust during the brutal winter storm that gripped much of the South and forced some of the first rolling blackouts in TVA history. While residents were plunged into 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 your power goes down, your heat pumps go off and pipes freeze. But less than one mile away is crypto, allowed to run on the low end. As soon as the power came back, boom! They’re cranking before we are.” 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 of 2021, I think, is when they turned this on and my wife and I just shook our heads, said, ‘No, we’re out of here.’” He hopes to stay in the area and keep fighting alongside neighbors like Judy Stines until the quiet comes back.
“I don’t really care what folks invest in,” Stines said with a sigh. “I do care about this noise that affects us every day, all day, all night. It’s never-ending.”