Neighbors unhappy with crypto mining in Glencoe, Minn.

GLENCOE, MIN. — Eddie Gould and Sandra Olson have lived for decades next to a cement factory, a cannery and a busy truck route. But they say nothing has disturbed their peace and quiet like the crypto mining that recently opened in this McLeod County town about 50 miles west of the Twin Cities.

“That’s the dominant factor in living here right now,” said Gould, a retired actor and cab driver. “It rustles the fabric of our house and our garden. You can hear it 24 hours a day – it never stops.”

The couple said they have stopped using their backyard deck because of noise from the bank of computers and cooling fans about 200 feet from their property. Olson, who bought the house more than 50 years ago, said she is “angry about the whole thing.”

Cryptomining is a computer-intensive process that produces cryptocurrency, with Bitcoin being the most famous example. Crypto miners use massive amounts of computing power to solve complex mathematical problems that provide value in the form of digital currency that is traded outside of the regular banking system.

The Glencoe crypto operation is owned by Bit49, a Colorado-based company. Cody Nelson, Bit49’s CEO, said the company has gone to great lengths to respond to the couple’s concerns.

“We’ve done everything we can,” he said. “We consult professionals; they say ‘do this’ and we do it.”

Throughout the upper Midwest, cities and power companies are hoping to cash in on crypto mining, which uses massive amounts of electricity. For a power plant, a crypto mine can be a gold mine.

A new crypto mining operation in Jamestown, ND, a town of about 16,000, will use twice the energy of the entire town. The Jamestown operation immediately ranked as the second largest customer of Minnesota-based Otter Tail Power Co.

Meanwhile, Brainerd’s municipal utility is moving forward with deals with two crypto operations that plan to locate in the city.

The Bit49 computers in Glencoe are outdoors in a gated gravel lot across the road from the Olson and Gould home. Called “modular data centers,” they are housed in large metal boxes that resemble shipping containers; they operate 24/7 and are cooled by a series of fans.

Nelson said the company has taken a number of steps to mitigate noise from the operation, which opened this winter. They run fans at lower RPM and have sensors installed that reduce fan speed in cooler weather when the computers get less hot. Exhaust vents now have hoods and baffles that help disperse the sound, and the company added an evaporative cooling system to further reduce the need for fan cooling.

Just last week, the company installed a sound-insulating polymer carpet along the fence, which Nelson said could significantly reduce noise.

“It was an expensive fence,” Nelson said, costing tens of thousands of dollars. “We’re not going to do any more with that fence. It would be cheaper to buy their house.”

When Bit49’s crypto operation first opened, it produced sound levels of 80 to 85 decibels, which is about the same as a gasoline-powered lawnmower or leaf blower running 24 hours a day. Nelson said the noise is now in the 70 to 75 decibel range, equivalent to a washing machine or dishwasher. The soundproofing carpet can reduce it by 20 decibels or more, he said, and the company plans to retest the noise level now that the soundproofing is installed.

Gould and Olson shouldn’t really have any expectation of quiet solitude, Nelson said, given that the land across the street from their home has been zoned for industrial use for decades. Seneca Foods has a busy cannery there, and there also used to be a cement plant on site.

“Honestly, in my opinion, they’re making noise because they think we’re making a lot of money and they think they’ll get something out of it by fighting us,” he said.

In recent months, the value of digital currencies has crashed in what traders have called “crypto winter”, with the price of Bitcoin falling almost 70%. Compute North, an Eden Prairie crypto data center, filed for bankruptcy protection last month with debts of between $100 million and $500 million.

The failure of a cryptominer could put a burden on other customers of utilities that bet heavily on the industry. But Dave Meyer, general manager of city-owned Glencoe Light & Power, said the company has planned carefully to protect its 2,700 customers. The utility spent a modest amount of infrastructure to operate the crypto mine and has already recouped most of its investment, he said.

“When we decided to move forward with this venture, we vowed that it would not have a negative financial impact on our customers,” he said. “This whole thing has been structured that way. We certainly couldn’t let a situation arise that would affect our long-term customers because we brought in a new one.”

Meanwhile, Gould and Olson will spend the sunny fall days indoors instead of on the deck. They say that the company’s efforts to cut the noise have not had much effect.

“No, no,” Olson said. “No. I don’t think there’s been any reduction at all. It seems to be as high as it was.”

Gould said the couple’s complaints to city and state officials have received no helpful response. The couple invited Glencoe’s mayor over to listen to the commotion, Olson said, and got nowhere: “You might as well talk to the vine here.”

“We’re worried about our health. We’re worried about our sanity,” Gould said. – We feel greatly oppressed.

Said Olson: “I’m just crossing my fingers that this one will go down.”