Murphy, NC 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, do it.”
But then she heard the sound of Krypto, a sound neighbor Mike Lugiewicz describes as “a little jet that never takes off,” and her ambivalence turned to activism. The noise came from stacks and stacks of computer servers and cooling fans mysteriously placed in a couple of acres of open farmland down Harshaw Road.
As soon as they lit and the noise began bouncing around their Blue Ridge Mountain homes, sound meters in the Lugiewicz 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 race track out here, five kilometers away,” Lugiewicz said, gesturing away from the crypto mine next door. “You can hear the cars driving. It’s cool!” “But at least they stop,” Stines chimed in, “and you can go to bed!”
The word “mine” is reminiscent of pickaxes and coal dust in this region, so neighbors around Murphy, North Carolina initially had no idea that mining a so-called “proof of work” crypto coin is more like playing a billion-page computer game Dice. Instead of shovels, modern miners require massive 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, sparking a virtual gold rush from Appalachia to New York’s Finger Lakes. Crypto miners began setting up stakes in places where electricity is cheap and affordable, and if there are any 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 funding and plans to expand and continue to go to the stock market.
But a year and a half after crypto got into that ruby pocket of Republican retirees and Libertarian CVs, anger at the mine helped reverse the balance of local power and forced the Board of Commissioners to formally ask their state and federal officials to “Introduce and champion legislation through the US Congress that would prohibit and/or regulate crypto mining operations in the United States of America.”
“Personally, I think that if we can get a bill in the system, other[North Carolina]counties will join,” newly elected Chairman Cal Stiles said after the bill was read. When the score was 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 ban his crypto mine. “That’s unconstitutional, to say the least.”
In 2019, Song and co-founder Ryan Fang made the Forbes Big Money 30 under 30 list, which includes 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 merged 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 comes 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” in hopes of listing public shares on the Nasdaq for sale.
A few weeks after that announcement, residents filled the Cherokee County Board meeting where representatives from the company were scheduled to attend, but soon learned that management had changed their mind following a power outage at another crypto location nearby.
“When (the outage) was investigated, it turned out that the power outage occurred because someone had fired a gun at one of the (service lines),” county commission chairman Dan Eichenbaum told the Room to a groan. “As a result, the crypto-mining people decided they wouldn’t come.” “They could have joined by video!” a frustrated local resident told the board after the clerk read the company’s statement explaining that they had canceled “for reasons of 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 barriers and install quieter, water-based cooling systems. But after walls were built on only two sides of the mine, construction halted and the community’s dashed hopes only added fuel to local anger as they headed to the polls.
“I’m old. I’m a senior. Social media isn’t really my purview,” Stines said as she explained how the noise pollution made her an activist. “I like being behind the scenes and serving cake. But I knew we had to win an election.”
Chandler Song fell silent when faced with follow-up questions on LinkedIn, but the Hershaw Road mine roars on as the Cherokee County Attorney looks for ways to give a newly passed noise pollution law legal teeth without upsetting liberty-loving landowners.
“The Tennessee Valley Authority doesn’t track cryptocurrency mines and it’s not one of our target markets,” Scott Fiedler, a spokesman for the TVA, told CNN. But he acknowledged that the federally owned utility, which serves millions in seven states, doesn’t track the mines with TVA power, and it’s up to local utilities like the Murphy Electric Power Board to decide who gets service and who gets service in the event of a power outage is cut off.
This latest emergency brought even more bad blood and lost confidence during the brutal winter storm that swept through much of the South and forced some of the first rolling power outages in TVA history. While residents were plunged into cold darkness, they believed the power-hungry mine continued to hum.
“They shut us down for 15 to 45 minutes to an hour every hour on Christmas Eve and Christmas Day,” resident Ron Wright told CNN. “Well, as soon as your power goes out, your heat pumps go out and pipes freeze. But less than a mile away is crypto, which is allowed to run on the lower end. As soon as the power came back, boom! They crank ahead of us.” Requests for comment from the Murphy Electric Power Board were not answered.
Back on Harshaw Road, Mike Lugiewicz pointed to the For Sale sign outside his house. “I think in September 2021 they turned that 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 side with the neighbors too fight like Judy Stines until calm returns.
“I don’t care what people invest in,” Stines said with a sigh. “I deal with this noise that affects us every day, all day, all night. It never ends.”