This article was written by Cyndie Roberson, a member of the National Coalition Against Cryptomining and the WNC Sierra Club. It appeared in the Sept. 5 edition of Finance Fridays With the Treasurer, a newsletter published by the office of NC State Treasurer Brad Briner:
Cryptocurrency is confusing – that’s why only 1-2% of Americans use it for transactions. And even fewer people understand where cryptocurrency comes from, but North Carolinians should pay close attention – it’s raising energy rates, using up our natural resources, and targeting our rural communities. Let’s break down how.
Where do cryptocurrencies come from?
Each year, a certain number of tokens are unlocked, and “miners” can win these tokens by essentially guessing the correct string of random numbers as fast as possible using millions of computers. To do so, they have to guess and throw out numbers at an unfathomable pace to beat their competition, which are other computers. Every 10 minutes, someone, somewhere around the world, wins the bitcoin lottery by guessing the correct string of numbers and it starts all over again.
But here’s the problem – that requires an excessive amount of computing power. How much? Bitcoin mining today accounts for up to 2.3% of our entire country’s annual energy consumption.
And that’s where this becomes a major problem for North Carolinians.
Cryptomining is concerning for North Carolina
Cryptomining at-scale requires the development of large “mines” – essentially, massive warehouses that hold thousands of computers. As you can imagine, that doesn’t create a lot of long-term jobs for communities, and there is little benefit – but there are major downsides.
Because cryptomining requires large amounts of energy, it often targets rural communities, especially where there’s easy access to tap into the power grid. And the impacts on these communities include:
Rate increases for everyday Americans. Cryptomining’s intense energy use is driving up electricity prices for everyone. By some estimates, cryptomining is costing ratepayers $1 billion more each year.
Excessive water usage. Cryptomining’s annual water consumption is equivalent to the average water consumption of 300,000 U.S. households.
Pervasive noise pollution. The massive servers that power cryptocurrency mining run nonstop. The sound can be heard from miles away and is incredibly disruptive and dangerous to neighboring communities.
Rural communities in North Carolina, Appalachia and across the country are feeling the brunt of this impact.
This is not a partisan issue. Both Democrats and Republicans are standing against cryptomining – from New York, where the governor passed a moratorium on mining, to Granbury, Texas, where the local Republican Party is supporting residents in their fight against a crypto company.
Let’s, for example, take a closer look at Arkansas. Not even one year after passing pro-crypto legislation, the Arkansas state legislature began to regret the frenzy of new crypto mines, and some felt tricked. One legislator described the bill as being “disingenuously promoted to lawmakers.” Even the co-sponsor of the bill experienced buyer’s remorse, and it wasn’t long until the Republican legislature passed a flurry of new laws to repeal key components and Governor Huckabee Sanders quickly signed them into law.
This is a bipartisan issue, and that’s why there’s a growing, grassroots campaign to raise awareness from the National Coalition Against Cryptomining, spanning more than a dozen states and quickly growing.
What’s happening right now in North Carolina
Today, it is estimated there are at least seven crypto mines across the state. We do not know for certain the exact number because there is no centralized body tracking their locations and they often call themselves "data centers." Cherokee County, on the far western tip of the state, has been severely impacted by an influx of crypto miners. Their story is a cautionary tale for other communities in North Carolina.
Out-of-state developers are trying to accelerate this number, but multiple Western North Carolina counties have proactively put in place ordinances which ban or greatly limit this industry in their communities. Most recently, the town of Hildebran, faced with a proposed mine by an out-of-state company, rallied together and defeated it.
Additionally, there are five pro-crypto bills pending in the N.C. legislature. North Carolinians need to understand if bills pass that either legitimize cryptocurrency or strip away local controls to regulate cryptomining, this will greatly increase the chance a crypto mine will open near you.