Virtual currency mining equipment (Shutterstock)
When Arkansas Business last forayed into the state's growing digital asset mining operations in July, cities and counties fought back, criticizing the noise, the vast desire for power and often shadowy foreign capital.
Faulkner, Clark and Van Buren counties are racing to establish zoning restrictions before state law 851 goes into effect on August 1, making it illegal for counties and local governments to “discriminate” against virtual currency mines. was.
These are clusters of connected shipping containers or warehouses filled with thousands of computer servers. Computers, often cooled by loud fans, solve complex mathematical puzzles to verify blockchain transactions and create new Bitcoins. Miners keep a portion of each.
At the beginning of last week, Bitcoin's value was more than $28,000, down from more than double its value in November 2021, but still a pretty penny.
“There is no other benefit to humanity in solving these puzzles,” said Eswar Prasad, a senior fellow at the Brookings Institution. Prasad told Arkansas Business that the price is a “strong economic incentive” to consume megawatts of electricity that could serve more positive economic pursuits. “By some estimates, 1% of the world's electricity is currently devoted to crypto mining,” he said, calling this a “misguided and environmentally destructive race to the bottom.”
Concerned residents of DeWitt are now fighting against plans to expand Bitcoin mining, with state Sen. Brian King, R-Green Forest, and Kenneth Graves, president of the Arkansas Rice Growers Association, joining the movement. There is.
Citizen groups met last week in Arkansas counties to voice their opposition to digital asset mining, with citizens calling on Governor Sarah Huckabee Sanders to call a special legislative session to repeal Act 851. .
Asked about concerns about cryptocurrency mining in Arkansas County, the governor's office said that Sanders' top priority is “the safety and security of Arkansans,” and that he is “working to combat communist China and protect the rights of all Arkansans.” “We will continue to work with lawmakers,'' he said.
China and Arkansas
An Oct. 13 New York Times report quoted King as saying that the city, located in Wyoming, is adjacent to a Microsoft data center that supports the Pentagon and about a mile from an Air Force base that manages intercontinental ballistic missiles. We introduced Microsoft's concerns about cryptocurrency mining in Cheyenne.
Dr. King promised to address the issue head-on. He said in a text message that since Act 851 took effect, lawmakers have learned more about “concerns that should have been discussed.”
He said House Bill 1799, which later became Act 851, was introduced late in this year's regular session and was filed unfairly quickly. He said the bill's title is deceptive and appears to only clarify regulations regarding digital asset mining. “But it’s just a facade to build a crypto mine in Arkansas and seemingly promote economic growth,” he said.
“Crypto mining facilities consume enormous amounts of energy and put a strain on the power grid,” he said, adding that China will ban Bitcoin mining in 2021, ostensibly citing energy usage and financial concerns. He added that he did.
He worries that cryptocurrency mining centers threaten critical U.S. systems, such as computer networks and a vulnerable power grid.
This summer, concerns over Chinese ownership blocked plans to build Bitcoin sites in Harrison, Vilonia and elsewhere, with a Times article saying Chinese-owned Bitcoin mines could collectively power 1.5 million homes Arkansas is among the 12 states to do so.
In July, Arkansas Business reported on a Bitcoin mine near Greenbrier. Although he is despised by his neighbors for being noisy and arriving unannounced, he is related to Gan Fu (or Fu Gan), the leader of Greenland Holdings (Shanghai). Communist Chinese government.
Due to public opposition, Harrison's Greenland project, whose spokesperson was Ethan Wang, the manager of a mine near Greenbrier, was canceled. Wang's business card, obtained by Arkansas Business, lists him as MetaHash's director of business development. Metahash Global is a subsidiary of Greenland Holding Group, which is associated with Green Digital, the company behind his rejected Harrison project. Newrays LLC is based near The Greenbrier. And the person who promoted the Vilonia project is ViLoAr LLC. Owners of Bitcoin hubs in Arkansas tend to be individually named LLCs, but shared ownership is common.
Opposition to Bitcoin mining is uniting conservative tech hawks, liberal environmentalists, and everyday, peaceful Arkansans.
Graves, president of the Rice Growers Association, told KATV he represents farmers in Arkansas County who are concerned about electricity and water. Local opponents are also concerned about businesses related to prairie duck hunting.
Businesses have been drawn to Arkansas because of its cheap land, lack of zoning in unincorporated areas, and significant discounts on large-scale power from Entergy Arkansas, the state's largest utility. This is because they are supplied.
Entergy offers special rates for miners as low as about three-quarters of a penny to just over a penny per kilowatt-hour, compared to 10 to 11 cents for household electricity; Not too much. rate. Demand charges typically account for more than a third of commercial power bills, and large customers also pay special rates for energy cost recovery and energy efficiency, a spokesperson said. Entergy will also require her three months' deposit from the miner, as well as a security deposit or irrevocable letter of credit.
Little Rock attorney Lyle D. Foster owns hundreds of acres of land in Arkansas County, much of it leased to “individuals, farmers, hunters” and commercial interests. He told Arkansas Business in an email Tuesday that he “didn't even know what crypto mining was” when he bought the property in 2018.
“One acre of that land is leased to Delaware-based Jones Digital LLC,” Foster wrote. “My understanding is that the company plans to use the site as a cryptocurrency mine, and my lease requires employees and other service providers to come from Arkansas County, and that the This means you are expected to pay all state and local taxes promptly.”
He said he was not aware of any Chinese or foreign ownership.
Belvia Rogers, who helped organize a meeting of concerned residents at the DeWitt Community Center on Tuesday, said she had invited Dr. King to attend and asked for television news coverage.
“There is one crypto farm that was built recently,” Rogers said. “It's a black and white issue. We are against it.”
Rogers said her group has heard that six crypto facilities are planned for the area. “I don't know if that's true or not, but I don't think anything good will come of it.”
DeWitt businessman Jackie Johnson, speaking just before the Arkansas County Quorum Court tightened the county's noise regulations this month, worried that if Bitcoin mines continue to proliferate, Arkansas “will no longer be a natural state.” He said he was doing it. We will become a Bitcoin nation. ”
She said that not too long ago, there were no Bitcoin farms in Arkansas.
“Sarah Huckabee Sanders and our Congress.” [who] welcomed them [with] Spread your arms. That's another thing. Bitcoin miners are not small family-run businesses. They're a big conglomerate that doesn't even exist in the United States,” Johnson said.
