Running Bitcoin Miners Out of Town

A steady hum emanates from 15 large metal containers located next to an electric substation in Limestone, Washington County. This is since late 2020. Each box is a Bitcoin “mine”. Each box houses computers that solve mathematical equations to keep the decentralized bitcoin network running. Computers are given bitcoin for solving such equations.

This operation, which is allegedly involved in noise complaints-related disputes with local officials and authorities, now faces a “life-or-death” battle. The dispute illustrates a nationwide trend that pits bitcoin miners—many of whom are looking for new homes in the U.S. as foreign governments ban their business outright—against regulators who likewise find them intolerable.

It is expensive to mine Bitcoins and emit a lot heat. The heat is lost by loud fans and rows upon rows. The high energy consumption attracts utility companies who have surplus power to sell. BrightRidge (the company that provides electricity to Limestone) used cheap rates and cash incentives to get Red Dog Technologies to place its computers right next to Limestone’s utility substation.

The operation’s noise was an issue for neighbors. BrightRidge sued them in Washington County. November 2021. Although the county commission approved the construction of “blockchain data centers” last year, the lawsuit claimed that it hadn’t approved “Bitcoin Blockchain verification facilities.”

It was not noise that one of the Limestone mine noise complaints was about. Red Dog was not granted permits to install sound barriers, as the county had urged the company. Washington County seeks to close the mine.

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Local governments across the country are adopting zoning legislation to ban bitcoin mining. These conflicts are often triggered by noise complaints, as in Limestone. The resulting regulatory interventions often attempt to address more than noise.

Project Spokane’s Bitcoin mine was brought to the attention in 2017 by complaints about loud noises. After conducting an investigation into the matter, officials from Missoula County announced they would restrict the use of energy by Project Spokane. According to them, Project Spokane’s mine was using up to 33% of county’s electricity. This is in direct violation of an established goal for net zero carbon emissions for 2050.

Missoula County placed new restrictions on mining cryptocurrency, beginning with a temporary zoning ordinance for 2019, which was then made permanent for the remainder of 2019. Miners could not be situated in areas that are industrial. They also need special conditional permits, which come with noise restrictions.

Missoula County has a new ordinance that requires cryptocurrency mining companies to purchase and produce sufficient renewable energy to offset 100 per cent of what they use. This is an important entry tax for mining operations in Montana which has abundant energy, mostly from hydroelectric dams.

Even if they aren’t used as a way to get around climate change regulations, noise complaints could lead to overreactions. The city of Plattsburgh in New York imposed an 18-month ban on any new mining or expansions in 2018 after a rise in noise complaints from bitcoin operators.

The wrong way to respond to the challenges presented by the mining industry is to try to zone or sue bitcoin mines. The negative effects they cause can be addressed by voluntary initiatives of mining companies to put sound barriers on their property or to switch to quieter cooling techniques. If local governments cannot find a peaceful way to coexist with the bitcoin miners they are stuck fighting them for years.