Since late 2020, a constant buzz has emanated from the 15 large metal containers set up next to an electrical substation in the unincorporated rural community of Limestone in Washington County, Tennessee. The boxes form a "mine" of bitcoin. Inside each, computers work to solve equations that keep the decentralized bitcoin network running. In exchange for solving these equations, the computers are rewarded with bitcoins.
Trying to sue or zone bitcoin mines out of town is the wrong response to the tradeoffs the industry presents
This operation is now embroiled in a life-and-death struggle with local authorities, reportedly over noise complaints. The dispute illustrates a national trend pitting bitcoin miners, many of whom seek new homes in the United States as foreign governments outright ban their businesses, against regulators who also find them intolerable.
Bitcoin mining computers consume a lot of power and therefore give off a lot of heat, which is dissipated by rows and rows of noisy fans. Utilities with spare power for sale like high power consumption. That's why BrightRidge, the company that supplies electricity to Limestone, used cash incentives and cheap fees to entice bitcoin company Red Dog Technologies to install its computers next to the utility's substation.
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But the noise generated by the operation was a problem for the neighbors. They filed a complaint with Washington County officials, who sued BrightRidge in November 2021. While the county commission had approved the construction of a "blockchain data center" the previous year, according to the lawsuit, it did not hadn't approved a "Bitcoin Blockchain Verification Installation."
One of the noise complaints about the Limestone bitcoin mine was not actually a noise complaint. Instead, the county objected to Red Dog not getting a permit for the noise barriers and also urged the company to install them. Washington County is trying to shut down the mine.
Across the country, other local governments are using zoning laws to restrict bitcoin mining. As in Limestone, these disputes often stem from noise complaints. But the resulting regulatory interventions often attempt to do much more than just dampen the noise.
Las quejas sobre el ruido llamaron la atención de los legislators del condado de Missoula, Montana, sober la mine de bitcoins del Proyecto Spokane en 2017. Poco después de commenzar su investigación, los funcionarios del condado anunciaron querían restringir el uso de energía de la business. They estimated that the Spokane Project mine was consuming up to a third of the county's electricity generation, undermining the locally set goal of net zero carbon emissions by 2050.
Beginning with a 2019 temporary zoning ordinance, which was made permanent in February 2021, Missoula County imposed several new restrictions on cryptocurrency mining. Mines could only be located in industrial areas and required special conditional use permits with additional noise restrictions.
The most important requirement of the new Missoula County zoning ordinance is that cryptocurrency mining operations purchase or generate enough renewable energy to offset 100% of the energy they consume. This is a major input tax for mining operations, especially in Montana, which is a mining hotspot because it has abundant electricity, mostly from hydroelectric dams.
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Noise complaints can generate excessive regulatory responses even when they don't become a backdoor for climate change regulations. When a growing number of bitcoin operations began to draw noise complaints in Plattsburgh, New York, in 2018, the city imposed an 18-month moratorium on new mines and mine expansions.
Attempting to sue or locate bitcoin mines out of town is the wrong answer to the compensation presented by the industry. Voluntary efforts by mining operations to build sound barriers around their properties or switch to quieter cooling methods can often remedy the negative externalities they create.