‘It’s been a disaster’ Residents warn neighboring areas of crypto mine impacts

CHEROKEE COUNTY, N.C. (WLOS) — Some residents of North Carolina’s westernmost county are warning neighboring areas about the impacts one cryptocurrency mine has had on their daily lives.

Loud computers churning out data are making noise 24/7 outside Murphy, North Carolina. On Harshaw Road in Cherokee County, there’s no zoning currently and owners can use their land as they like.

The computer farm with fans and high tech computers is owned by an out-of-state company and part of the global industry that’s tied to the world of cryptocurrency, like Bitcoin. Cryptocurrency is an electronic currency that is not anchored to any central authority. It exists in a virtual world of interconnected computers. The actual process of validating and protecting those currencies is called “mining.” In order to engage in crypto mining, a “miner” uses a large number of high power computers that constantly run complex mathematical algorithms to ensure that no crypto currency is being used multiple times.

Some crypto investors believe it will one day take over as the world’s leading currency.

After China banned crypto mines, investors with deep pockets eyed Western North Carolina and other states like Texas with cheap electric rates and counties with loose land zoning to build crypto mining computer farms.

Crypto is short for encryption, in that the computers constantly running are searching for a specific formula of over 100 numbers to crack a code on transactions made globally. When a company’s computers get the code, they get paid with something like Bitcoin, which can make large crypto mining companies tens of millions of dollars each year.

But in Murphy, the immediate impact has not been millions of dollars, but rather outdoor noise impacting the serenity of the area.

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“It’s been a disaster to our whole community,” said Merinda Woody, who works as the county attorney in neighboring Clay County. She and residents there have watched what’s unfolded in Murphy.

“When they first started putting it in, I didn’t think it was that big of a deal,” Mike Lugiewicz said. He has since moved out of his nearby house because of the noise making it impossible to work from his home office.

“I think there’s money involved and that’s the problem,” said Tom Lash. He and his wife Rebecca moved from Atlanta 15 years ago to buy their dream property.

“We found this nice house that we really loved,” he said. “We bought it and made the move.”

Their home is about 3.000 feet as the crow flies away from the crypto mine. Lash said the day News 13 crews were out for an interview, the hum from the computer farm was tolerable since there’s a buffer of trees between the mine and his home. However, both Lash and Lugiewicz said at night the computer farm can churn loudly, sounding like a never ending airplane engine and the sound can carry through the county. Because the county has no current zoning rules, the mine and two others could open and operate without going through any zoning requirements when it comes to buffering noise.

“We’re free here,” said Dan Eichenbaum, a Cherokee County commissioner who’s served for years and formerly served as chairman. “You have the right to do what you want on your own property. But the noise is really, very loud from the crypto mine.”

“At night, it gets really still,” said Lugiewicz. “The air gets humid and the sound carries like crazy.”

“It isn’t what I would call a fair shake,” Lash said regarding the lack of county oversight in the crypto mining operations. Both Lugiewicz and Lash said they believe their property values may take a hit.

County officials say the crypto mining farm is owned by a company called Exponential Digital. The machines have earned a reputation as huge power eaters with the potential to impact the power grid since they use so much electricity to operate.

Commissioner Eichenbaum acknowledges the company’s been an indifferent neighbor.

“They didn’t do their due diligence in asking themselves, ‘am I going to create a problem?'”

News 13 questioned the commissioner whether it was a failure of due diligence, or just disregard on the company’s part.

“In a sense, you might say that,” Eichenbaum acknowledged.

“They’re just in it to make a buck,” said Clay County attorney Woody.

After watching what’s unfolded in Cherokee County, and with the blessing of Clay County commissioners, Woody worked with members of the county’s Land Use Board and developed a new ordinance now in effect.

“There’s no commercial crypto mining industry allowed.” She has advice for other counties: “Get an upper hand on it before it gets an upper hand on you.”

News 13 reached out to leaders in counties across the mountains. Polk County is putting certain rules in place for crypto mine operations in the area. Buncombe County commissioners are currently considering creating a one-year moratorium on cryptocurrency mining. Commissioners have set a public hearing on the issue for May 2, 2023. Other counties, including Haywood, Macon and Jackson, are taking preemptive measures to consider restrictions, or banning, crypto mining. Rutherford County leaders say they haven’t had any complaints, but as folks in Cherokee County can attest, waiting can be too late.

“We can’t do anything right now about the existing crypto mines,” said Eichenbaum.

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Cherokee County has two other crypto mines. One is by a power substation, and another is in a building in the town of Marble. It’s owned by another encryption search company that’s put in sound barriers. The company is called Core Scientific.

“No one complains about them because they know how to control the noise,” said Eichenbaum.

Cherokee County is working on an ordinance to make sure the loud outdoor crypto mine on Harshaw Road is the last.

“It will prevent any intrusion,” said Eichenbaum, who expects the ordinance to pass within three months.

For those stuck with the computers churning next door, they hope their story resonates for folks to contact county leaders before it’s too late.

“There’s about 19 counties in Western North Carolina with no zoning laws,” said Lash. “Try to stop it before it happens.”

Last year, there were reports four more mines were going up in North Carolina, further east. China banned crypto mines and the state of New York has a statewide ban. North Carolina may get a reprieve. News Thirteen has learned that because of cheap electricity, crypto mining companies are now setting their sites on the Lone Star state aka Texas, where land use restrictions in many counties remain loose.

News 13 reached out to multiple executives allegedly tied to the crypto mine causing much concern in Cherokee County, including one provided by county leaders. No one responded to News 13 at the time of this publication. This story will be updated with any further comments regarding the matter.