Cryptocurrency mining, which relies on abundant power, expanding in Iowa

Cryptocurrency mining — which relies on cheap, abundant energy to power banks of computers — is expanding in Iowa, with Hardin County considering two new sites.

MiningStore, which in 2019 opened its flagship mining site in Grundy County, is asking Hardin County, in north-central Iowa, to rezone two parcels from agricultural to manufacturing to allow for installation of mining sites next to electrical substations owned by Midland Power Cooperative.

“This is kind of a new thing, not like a restaurant or a commercial facility,” said Hardin County Supervisor BJ Hoffman.

The Grundy County site has a large Quonset hut humming with fans that cool more than 1,000 computers that work round the clock to solve math problems that create bitcoin, the world’s most well-known cryptocurrency. As each new block of bitcoin is solved, mining operations like this get a payout.

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The Hardin County sites, if approved, would be smaller with vented crates that contain servers.

MiningStore founder and Chief Executive Officer JP Baric, 25, of North Carolina, spoke earlier this month to the Hardin County Board of Supervisors. The county’s Planning & Zoning Commission will consider his proposal Jan. 24 and then make a recommendation to the supervisors.

Cryptocurrency mining has raised concerns in Iowa and elsewhere because of how much electricity it uses. The White House reported in August the global electricity use for crypto mining was between 120 billion and 240 billion kilowatt-hours per year, which is more than the total annual electricity use of some countries including Argentina and Australia. This surge in demand is happening as the world is trying to reduce electricity consumption because of climate change.

Each of the proposed Hardin County sites would use 5 megawatts, the equivalent to powering 4,000 to 9,000 homes, according to the U.S. Nuclear Regulatory Commission.

But supporters of crypto mining say they are adding resilience to the power grid by using surplus wind and solar energy that’s often wasted if utilities don’t have battery storage. At times of peak energy needs, the mining sites would halt operations, giving the utility more capacity for other customers.

“They sign an agreement with Midland Power Cooperative to shutter their operation to a minimum during peak times, whether it’s July in Iowa when everyone is using AC or in the middle of December when power consumption is high as well,” Hoffman said.

Cedar Falls Utilities signed leases in 2021 with two companies, Simple Mining and Energy Conversation Group, to place crypto mining crates at its utility site, the Waterloo-Cedar Falls Courier reported in June.

The utility is trying out the arrangement because the mining developers pay for infrastructure and help with demand response, the city-owned utility said in a PowerPoint presentation that Baric shared with The Gazette.

But these local utilities still rely a great deal on coal and natural gas.

Midland Power Cooperative, which provides electrical services to 17 Iowa counties, gets at least 46 percent of its power from coal, according to its website. In 2021, Cedar Falls Utilities was getting about 60 percent of its energy from non-renewable sources, including coal and natural gas.

The MiningStore also has opened a crypto mining site in Marshall County, near St. Anthony, Hoffman said.

The Black Hawk County Board of Supervisors in August decided against rezoning to allow a crypto farm, citing noise and energy use. Grundy County also voted down a second location proposed by MiningStore.

FTX founder Sam Bankman-Fried, once hailed as the ‘King of Crypto,’ spoke on video for the first time since the sudden collapse of his cryptocurrency exchange company, pushing back against allegations of fraud.

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