Second Thoughts About Crypto Mines

Cryptocurrency mining equipment (Shutterstock)

Arkansas cryptocurrency mines, already reviled by neighbors and under scrutiny in court, are now subject to legislative second-guessing.

Arkansas lawmakers who protected noisy and energy-hungry bitcoin mining complexes last year with a law preempting local restrictions on them are revisiting the issue.

Many say they were mistaken when they voted for Act 851 of 2023.

Sen. Missy Irvin of Mountain View voted for the law, which outlawed “discrimination” against the centers, complexes filled with hundreds of computers solving complex arithmetic problems to create bits of cryptocurrency. But that was before a crypto mine opened in her district, Senate District 24.

“At the time the legislation was presented … the crypto-mine in my district was not operational,” Irvin told Arkansas Business in an email. “Had I known how horrible and offensive the noise would be for the people living near the facility, I would have never voted for this legislation. There are now many legislators who feel the same.”

Digital currency mines and plans for them stirred controversy statewide last year, and cities and counties raced to apply limits before the law took effect Aug. 1. Arkansans complained about their heavy power use, environmental impact and Chinese ownership.

Last month, Irvin authorized a legislative inquiry into crypto mines.

“This is a relatively new industry in our state, and as they have sprung up, I think there are many concerns on several levels,” Irvin said. “The constant 24/7 noise at high levels is clearly a public health issue.”

The digital mine in Irvin’s district has “severely impacted” the health of a child with autism who lives nearby, she said.

“I do believe there should be a statewide standard for what an acceptable noise level should be for these facilities,” Irvin said. “A county should not be required to spend valuable resources monitoring noise levels … .”

Faulkner County enacted a noise ordinance last summer after a crypto mine near Greenbrier drew dozens of noise complaints and a lawsuit by nearly two dozen residents.

The data center’s owner, Bono Management Inc., has built noise barriers that keep the whine down to just below the nighttime maximum of 55 decibels. But officials who spoke last month before members of the joint House & Senate Public Health, Welfare and Labor Committee said the county’s noise ordinance is hard to enforce. Deputies testified that they have to measure temperature, wind speed, direction and ambient noise from multiple spots to get acceptable sound measurements.

“I believe the local governments should have the ability to govern this industry for their communities,” Irvin said. But she also favors state oversight: statewide standards, permits and “checks and balances,” she said.

Irvin fears the facilities could impede local efforts to recruit other kinds of businesses, enterprises that “would actually bring more jobs into an area versus the very minimal jobs created by these crypto mines,” she said.

Crypto mines using water to cool the computers are quieter, but Irvin said heavy water use might overwhelm systems in small communities.

“The same is true for the electrical grid and [power] demand,” Irvin said. If cooling systems discharge water, they would have to get permits from the Arkansas Department of Environmental Quality.

Irvin and Rep. Lee Johnson of Greenwood directed a legislative subcommittee to study the issue and work on draft legislation for 2025.

Tom Harford of the Arkansas Blockchain Council , which advocates for sustainable U.S.-owned mines, said the council “supports any efforts made to modify Act 851, whether it be on noise ordinances or foreign ownership of crypto mines in the state.”