• notebookcomputer
  • 30/09/2022

An Appalachian town was told a bitcoin ‘mine’ would bring an economic boom. It got noise pollution and an eyesore.

LIMESTONE, Tenn. - It started as a low hum one day last spring. Then it got louder, and soon some residents said the noise was like a jet engine idling on a nearby tarmac.

The unincorporated clutch of homes and churches at the base of the Appalachian Mountains offers expansive vistas of lush farmland, thick woods and towering ridges in all directions. Neighbors know one another. Most residents have family bonds spanning generations or moved to this tranquil patch to escape city noise.

Instead, the noise came to them in April last year when the Tennessee-based firm Red Dog Technologies opened a plant in Limestone to mine (or create) new bitcoin, the original and still-largest cryptocurrency.

The process relies on massive computers performing complex calculations - all while kept at a constant temperature by equally massive cooling fans - and that can get noisy.

The Limestone mine operates day and night, growing louder at night and on weekends when bitcoin’s electricity-hungry computers can take advantage of down time and lower prices on the electricity grid and ramp up their algorithmic-solving power.

“We couldn’t have people over to gather in our front yard because we could hardly hear one another talking,” said Preston Holley, whose home sits across the street from the mine.

Appalachia, with its cheap electricity from coal, natural gas and hydro, was already attractive to bitcoin miners when China, which dominated world production, cracked down on such operations last summer, worried about the volatility of digital currencies.

Companies forced out of China began scouting new locations across rural America. Appalachia, more accustomed to coal-caked helmeted workers than tech-savvy blockchain enthusiasts, saw an influx of miners.

But while supporters tout economic benefits such as an expanded tax base and job creation, residents in areas that initially welcomed crypto mining are now experiencing buyer’s remorse.

Kent Harris, a Washington County commissioner, looks back on his vote authorizing the Limestone crypto mining operation and shakes his head.

“It looks like a German POW camp,” Harris said of the bitcoin mine, which is surrounded by barriers, cameras and fencing topped with razor wire.

“I have never regretted a vote like this one. I sure wish I could take it back,” he said.

A lawsuit filed by the county in November accused Red Dog Technologies, the mine owner, and BrightRidge, the local electricity provider that owns the land where the mine is located, of zoning violations and causing “immediate and irreparable injury, loss, and damage.”

BrightRidge declined to comment on all aspects of the case, citing ongoing litigation. But according to local media reports, BrightRidge chief executive Jeff Dykes affirmed the company’s desire to mitigate noise issues.

Todd Napier, director of site acquisition for Red Dog, told the Washington County commissioners at a public meeting last summer that they are taking the noise issue very seriously.

“We thought it was a data center going in there,” Harris said, noting that the zoning application had mentioned a “block chain data center.”

He added that the county had worked closely with BrightRidge on many past projects without problems. And because of this partnership, nobody did their due diligence and greenlighted what was billed as a “solar farm and data center.”

County commissioners blocked attempts by BrightRidge and Red Dog to open a second mine.

The lawsuit claims that the bitcoin facility violates local zoning ordinances. “BrightRidge exacerbates the problem by refusing to cease operation upon repeated written and verbal requests,” it alleges.

Tim Whaley, BrightRidge’s director of public and government affairs, declined to comment on the company’s relationship with Red Dog, citing ongoing litigation.

On March 15, a judge agreed with the county that zoning was violated, but is allowing the mine to stay open pending appeal.

Red Dog said in court documents that it had informed commissioners it was using the site for bitcoin mining, and that it has spent $600,000 on noise mitigation. The company also said in court documents that it would face a loss of $36 million over the next 18 months if the mine is forced to close.

In the meantime, residents of Limestone are left grappling with the noise.

Holley, his wife, Christy, and five daughters built a new house eight years ago with a view of the nearby mountains. The BrightRidge substation 100 yards away from their front porch wasn’t the most attractive, but it didn’t entirely destroy the view. The mine inside the giant shipping container in the same compound was a different story.

“This is our forever home,” Holley said. But the noise emanating every night from the bitcoin mine, the Holleys fear, has tanked the value of their property and keeps them up at night. Recent noise mitigation measures by Red Dog, such as shrouding the shipping container in green shrink wrap, have muffled the sound, but not enough to keep it from creeping into the house.

“The noise is different now, but I wouldn’t say better,” Holley said.

Summer also brings more noise as the fans are needed round-the-clock to provide computer cooling.

[Why bitcoin’s energy problem is so hard to fix.]

Craig Ponder, pastor at the New Salem Baptist Church, a red brick church atop a hilltop about a mile from the mine, compared the noise to the jet engines he heard while serving in the military. He said that the noise can make it difficult for congregants to chat with each other in the parking lot after services.

An Appalachian town was told a bitcoin ‘mine’ would bring an economic boom. It got noise pollution and an eyesore.

The recent noise mitigation measures have helped, Ponder said. “I do have to give them props for trying to reduce the sound.”

Where the noise is heard depends on many factors, including wind, topography and time of day, according to sound experts.

Some residents as far as 5 miles away report hearing the mine. In contrast, others near the mine say the noise isn’t an issue.

Deanna Laws, who lives about a mile from the mine on New Salem Road, said the mine was never a huge bother. “But since they put the sound barriers up, we don’t hear it.”

Such disparities are to be expected, given the surroundings, said Sean Connolly, founder of Big Sky Acoustics, an independent sound mitigation company in Big Sky, Mont.

“In a rural environment, you have a very low ambient noise level anyway, so you walk outside and a creek is gurgling, birds are chirping, but there is not a lot of man-made noise. Once you take some of these bitcoin mining facilities, the noise carries, there is nothing to hide it or mask it,” he said.

In addition to the ramped up noise at night, nature magnifies the sound by creating a temperature inversion, Connolly said. As the earth cools and the heat escapes after dark, there is a layer of air higher up that stays warmer.

“Sound bounces off this layer and projects even further,” Connolly said, explaining that emerging fan technology including blades that “scoop” air rather than propel it may ultimately offer relief.

About one mile from the BrightRidge substation, Carolyn Broyles’s home offers stunning panoramas of the mountains, but when the wind is right, the bitcoin mine sound sweeps across a nearby ridge top and into her yard and house.

When she first heard the noise in the spring of 2021, she thought it was tractors, something that wouldn’t be unusual on her 200-plus acres of farmland. Except it was April.

“There was no reason for there to be tractors,” Broyles said, so she drove around and soon found herself looking at the bitcoin mine. She claims local residents were misled.

“We thought it was going to be a data center. I’m not totally unsophisticated, but we didn’t know what blockchain or bitcoin was,” said Broyles, who filed a separate lawsuit against BrightRidge and Red Dog seeking unspecified damages. “We are country people, that’s the bottom line, and you’ll never convince me otherwise.”

Court documents filed by Red Dog said it told officials that the site was for use as a bitcoin mine.

But those objections from local residents have complicated prospects for cryptocurrency mining in Appalachia - despite cheap land, plentiful power and utility companies hungry for additional revenue streams to replace the manufacturing customers that have been leaving for decades.

“Ideally, there would be no people around. We have a facility in South Carolina where you can’t even find it because trees surround it and nothing is around it,” said John Warren, the chief executive of GEM Mining, which owns 32,000 bitcoin miners.

Operators also have to invest in the right technology. Plants that rely on fans for air cooling generate a lot of noise. Another newer method that relies on liquid immersion technology for cooling is quieter.

Warren said many people getting into the bitcoin business may not have anticipated the noise.

“This is an industry that is on fire now, and a lot of people may not have known the noise the machines make; there are a lot of inexperienced people coming into the industry, and they are causing issues,” Warren said.

But there is a lot of money to be made. Red Dog Technologies, which also operates under the name GRIID, is a relatively small player in the industry but is preparing to go public this spring. Their SEC filing projects revenue of $1.6 billion in 2023.

Warren, and others, said that crypto could bring needed benefits to economically parched Appalachia. In the case of Limestone and BrightRidge, local media reported that the mine uses enough power to supply 10,000 homes and became the utility’s largest customer overnight.

When Whaley, BrightRidge’s spokesperson, was asked about that figure, he didn’t dispute it, but said “You can Google it,” again declining to speak specifically because of litigation.

Shane Hadden, a lecturer in finance at the University of Kentucky who has studied Appalachia economics, said that bitcoin mining is good for the state.

“It generates jobs, revenue, a potential base into future expansion into related services,” he said.

While dozens of new cryptocurrency mines have opened across Appalachia since the China crackdown, Limestone isn’t the only one getting a mixed reception.

In Cherokee County, N.C., local residents were initially in favor of, or indifferent to, the new cryptocurrency businesses. The first bitcoin operation took over an abandoned factory in the town of Marble. The enclosed space initially did not produce much noise, said Dan Eichenbaum, chairman of the county board of commissioners.

Then a second, unenclosed facility opened, creating similar noise issues to those found in Limestone.

Phoebe Thompson, a Bowdoin College environmental and oceanic sciences graduate, moved to the adjacent town of Murphy two years ago. Her family founded the publication Bird Watcher’s Digest and are active environmentally. She laments the damage to the area’s wildlife and peaceful character.

“I grew up where I heard birds, insects, frogs; the quiet here was a huge draw for me,” Thompson said. She said the quiet has been smothered by the whir of the mine and created an “ecological dead zone” that disorients wildlife.

Cherokee County has taken a less confrontational approach than Washington County, in Tennessee, but it’s unclear what the final results will be. “Noise is a very relative thing; what bothers some people doesn’t bother others,” Eichenbaum said.

He said the board is dealing with negotiating with the bitcoin mining operator to achieve a resolution.

Meanwhile, back in Limestone, the noise lingers, and the lawsuits continue. Residents are left trying to weigh potential economic benefits against the down sides. Harris said residents in the area just want the area to go back to the quiet, neighbor-know-neighbor atmosphere that permeated before the mine opened.

“The mine operator said this mine was in the middle of nowhere, but to us, it is not the middle of nowhere; it is our home,” Harris said.