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

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.”

But then she heard it sound of crypto, a noise that neighbor Mike Lugiewicz describes as “a little jet that never leaves” and her ambivalence turned into activism. The rocket came from stacks and stacks of computer servers and cooling fans, mysteriously set up in a few acres of open farmland down Harshaw Road.

When they fired up and the noise started bouncing around their Blue Ridge Mountain home, sound meters at the Lugiewicz farm showed readings ranging 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 away right here,” Lugiewicz said, pointing 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” conjures up hoes 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” cryptocurrency is more like playing a computer game with billion-sided dice. Instead of shovels, modern miners need massive amounts of server power to roll the win count faster than their competitors around the world.

This unrelenting demand for electricity was one of the reasons why China banned cryptocurrency, tapping into a virtual gold rush from Appalachia to New York’s Finger Lakes. Crypto miners started putting down stakes in places where electricity is cheap and affordable, and if land use or noise regulations even exist, enforcement is lax. 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 scale up and go public.

But a year and a half after crypto arrived in this ruby-red pocket of Republican retirees and libertarian lifers, anger over the mine helped tip the local balance of power and forced the board to officially ask its state and federal officials to “introduce and champion legislation through the US Congress that will ban and/or regulate crypto mining in the US.”

“I personally believe that if we can get a bill into the system, other (North Carolina) counties will join,” Board Chair-elect 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 responded via LinkedIn DM when asked about the move to ban his crypto mine. “It’s unconstitutional, to say the least.”

In 2019, Song and his co-founder Ryan Fang made the Forbes “Big Money” list of 30 under 30, 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 last quarter of 2021 they claimed “$24.4 million in 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 hopes of selling public shares 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 its mind after a power outage at another nearby crypto site.

“When (the outage) was investigated, it was determined that the outage occurred because someone shot, with a gun, one of the (service lines),” County Commission Chairman Dan Eichenbaum told the room to groans. “As a result, the crypto miners decided not to come.” “They could have joined over video!” one resident told the board in frustration after the clerk read the company’s statement explaining they were canceling “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 isolation walls and install quieter water-based cooling systems. But after erecting walls on just two sides of the mine, construction stalled, and the community’s dashed hopes only poured more fuel on local anger as they headed to the polls.

“I’m old. I’m retired. Social media isn’t really in my rescue,” Stines said as she explained how noise pollution turned her into an activist. “I like to be behind the scenes and I like to stir the pot. But I knew we needed to win an election.”

Chandler Song fell silent when presented with follow-up questions on LinkedIn, but the mine on Hershaw Road roars on as the Cherokee County attorney looks for ways to put legal teeth into a recently passed law against continuous noise without rankling liberty-loving landowners.

“The Tennessee Valley Authority does not pursue cryptocurrency mining and it is not one of our target markets,” Scott Fiedler, a TVA spokesman told CNN. But he acknowledged that the federally owned utility that serves millions in seven states doesn’t 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 off. a blackout.

The latest contingency brought even more bad blood and lost confidence during the brutal winter storm that gripped much of the South and forced some of the first rolling blackouts in TVA history. As residents were plunged into cold darkness, they say the electrocuted mine continued to hum.

“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, when your power goes down, your heat pumps go off and the pipes freeze. But less than a mile away is crypto, which is allowed to run on the low end. As soon as the power comes back on, boom! They’re cranking before we’re .” 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 2021, I think, is when they put 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 quiet 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 never ends.”

Correction: This story has been updated to correct a quote from Judy Stines.