Commission bans Bitcoin mining | National News

Loudon County Commission approved Monday a six-month moratorium on Bitcoin mining operations in the county.

Bitcoins are a type of cryptocurrency created by powerful computers through the generation of coded algorithms to ensure security.

Large fans needed to cool the computers generate too much noise, District 5 Commissioner Van Shaver said at a June 20 workshop.

Shaver said he has been looking into complaints from residents in his district regarding a Bitcoin operation on Hickory Creek Road near the Watt Road exit of Interstate 75/40.

“It sounds like a jet airplane engine running,” he said.

Shaver said similar operations by the same company in Washington County met with public opposition and had to close after a lawsuit was filed. He said he is worried the planned addition of more modules combined with hot weather will make the problem even worse.

“The harder the fans run, the louder it gets,” he said.

Shaver also said when the company applied for a permit to build the operation they described it as a data center. He said he wants commission to discuss a halt to new Bitcoin operations in the county until the situation can be resolved.

Blake Shelton, site manager for Ava Data, was at Monday’s meeting and offered to provide more information about the company.

“We want to be friendly neighbors,” he said.

Shelton told commissioners at the workshop his company and the property owners submitted a special exception application, which was approved, in September to the Loudon County Board of Zoning Appeals. He said the company appeared before the Loudon County Planning Commission in November and was unanimously approved.

“We also supplied a representative photo of modular pods such as what would be deployed on site as part of the review process,” Shelton said.

He said the facility is a blockchain data center that solves mathematical problems to find the next correct set of numbers in a code. The more computers working, and the more powerful the computers, the faster calculations can be run and the greater amount of bitcoins Ava Data can obtain.

The facility currently employs five and will eventually employ 12. The operation, which is still under construction, needs large amounts of affordable electricity. The facility buys electricity from Lenoir City Utilities Board, he said.

Shelton said the company pays an electric bill of about $750,000 per month. When completed, the facility will require about 40 megawatts of electricity per month, he said.

“Thanks to LCUB, electricity prices in the region are very affordable,” he said.

When choosing a site, the company looked for a heavily commercialized area. The location is near the interstate and a truck stop and away from residential neighborhoods. He said the company worked with a consultant to perform a sound study and outfitted the modular pods that house the computers with sound-dampening louvers.

Shelton said noise from the fans at about 70 decibels could be mitigated by monitors and the installation of sound barriers. He said the company has checked with commercial and industrial neighbors and is not getting complaints.

“Some of the people we talked to didn’t even know we were already operating,” he said.

Ty Ross, general manager of Loudon Utilities Board, said at a June 20 workshop the utility has been approached by similar companies but decided not to take them on as customers because the amount of electricity used could tax capacity.

Ross said the most suitable places for such businesses, which are not good job creators, are in Rust Belt and rural areas with underutilized electric grids. He said sound barriers such as those along interstates have been used to reduce noise.

Shelton said parent company Red Dog Technologies, LLC is based in Washington County. The company was able to reduce noise at that site but faced zoning issues. The operation has since been moved to an industrialized area.

“We learned a lot from this experience and are applying those lessons from the Red Dog situation to all our future operations, including the Ava Data site,” he said.

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