At least eight cryptocurrency mines are operating in eastern Tennessee, in addition to one in southern Kentucky.
NEW TAZEWELL, Tenn. – At night, Mikki Moondream Stump would listen to crickets and birds from the balcony of his Jellico home. Then, she said a faint hum started to drown out the peace and quiet of her rural neighborhood.
“I left our big city because of this,” she said. “I lived near the airport. I didn’t want that buzz. I didn’t want that distraction.”
She said the distraction came from a new cryptocurrency mining site next to the old Jellico Motel.
Rows of machines inside gray boxes work around the clock to validate Bitcoin transactions.
“I send you a bitcoin and you send him a bitcoin. All of these machines make sure yes, it’s a legit transaction,” Scott Wade, chief operating officer of Exponential Digital, told a town hall meeting in february.
Exponential Digital operates Jellico’s crypto-mining site, as well as those of Tazewell, Oneida, Crossville and Decatur.
The growing presence of the mines is causing objections among residents and concerns among elected officials, according to a 10News survey.
Wade told 10News that questions about the operations needed to go to PrimeBlock. PrimeBlock representatives did not respond to our requests for comment.
There are at least three other crypto mines in the area – in Maynardville, Knoxville and the Tri-Cities.
Wade said Exponential Digital focuses its cryptocurrency mining operations in the Tennessee Valley Authority region, which is why so many of them have sprung up in East Tennessee.
“This is a new industry coming into the United States, and our company is helping to facilitate these operations,” Wade said. “We chose TVA because of their great reliability and max horsepower and, obviously, their prices.”
According to CNET, the first mine to verify a “block” of Bitcoin transactions can earn a reward of around 6.2 Bitcoin, which is worth around $225,000. As more Bitcoins are created, the difficulty of verifying “blocks” of transactions increases and the rewards are halved approximately every 4 years. This is called the “bitcoin halving”.
The first “block” was mined in 2009 and earned the miner about 50 Bitcoins. The reward for subsequent blocks was halved in 2012 to 25 Bitcoins, then again in 2016 and 2020.
Bitcoin’s supply is limited to a final cap of 21 million, determined in the cryptocurrency’s source code. The last bitcoin is expected to be paid in 2140, as the difficulty of producing more becomes increasingly difficult over the years and begins to require more computing power.
Even if the mining succeeds, however, Claiborne County Mayor Joe Brooks said his community would not benefit.
“Absolutely not. Not a bit of it comes from County Claiborne,” he said. “It will be taxed commercial. Other than that, there is no revenue for the county.”
Brooks said the crypto mine employs a handful of people, though he’s not sure if any of them are local.
He said the Tazewell crypto mine could use up to 20 megawatts of power per year. Studies estimate that the industry as a whole uses as much energy as Argentina.
Fans run 24/7 to prevent electrical fires because computer servers spin so hard and fast.
“It’s not something the Claiborne County Volunteer Fire Department is capable of handling,” Brooks said. “We don’t have the right equipment, without having to cut the circuit breaker to put these [electrical] turns off.”
He said County Claiborne is dependent on tourism due to its proximity to Lake Norris. The crypto mine is on top of a hill, visible from the main road on the road north of Tazewell.
“It’s a horror,” said the mayor. “It’s one of those things that, when you see it, leaves you with the impression of a beautiful landscape – and then that.”
RELATED: Yes, You Have to Pay Taxes on Cryptocurrency
There is nothing Claiborne County can do to stop crypto mining as it has no zoning laws in place to regulate them.
“You’re freaked out if you do and freaked out if you don’t,” Brooks said. “You are at risk if you have zoning in place and you are at risk if you don’t have it in place.”
In Campbell County, Mikki Moondream Stump said she felt her community had been let down.
People told him there would be jobs, better internet and improved electrical services.
“Well, that didn’t happen,” she said. “You took our land and put this ugly thing right there. It’s just not good for us.”
Bitcoin, the largest and most popular cryptocurrency on the market, is often criticized as extremely volatile with few federal regulations to protect investors. On May 10, the value of a single Bitcoin was around $31,000, down from around $36,000 the previous Friday.
Experts from Chainalysis, a platform analyzing blockchain technologies, also said cryptocurrency crime hit an all-time high in 2021, with an estimated $14 billion worth of cryptocurrency falling into wallets associated with hackers, frauds and scams.