Cryptocurrency mining firm struggles to expand in Eastern Iowa

This hangar is the hub of a Grundy County Bitcoin mining operation owned by the MiningStore. (Bailey Cichon/The Gazette)

A second Iowa County has rejected plans to expand cryptocurrency mining in Eastern Iowa, citing concerns about noise and energy use.

Background

The MiningStore, a Texas-based company, opened its first cryptocurrency mining site in Iowa in 2019 in Grundy County.

When The Gazette visited in April, the domed white building was 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.

J.P. Baric, founder and chief executive officer of the MiningStore, told The Gazette he located his flagship site in Grundy County because of cheap electricity. The site is next to a power substation for the Grundy County Rural Electric Cooperative, which charges some of the lowest electricity rates in the state.

Baric said in April he hoped to expand with five more sites in Eastern Iowa, focusing on Grundy, Black Hawk and Tama counties. The Grundy County Board of Supervisors voted 4-1 in May against rezoning another site to allow a second MiningStore operation, saying it was too close to a park.

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What’s happened since

The MiningStore applied in June to rezone nearly an acre of land in Black Hawk County from agricultural to commercial-manufacturing to build a new mining site. The site would have been just across the border from Grundy County and near another substation for Grundy County REC, said Tom Little, a Black Hawk County supervisor.

Black Hawk County Planning & Zoning voted down the proposal 5-, but the supervisors discussed the idea June 28.

Baric told the board the new site would add seven new jobs and more than $2 million in infrastructure, such as updates to the local electrical grid. While some neighbors worried about the noise from fans, Baric said they are no louder than a tractor working in a field.

“This opportunity has the ability to build desirable communities and, I believe, to change the future and accelerate the 2028 vision of Black Hawk County,” Baric told the supervisors. “Not only are we bringing high-paying IT jobs to the area, but we’re also promoting economic vitality by changing the cash flow coming to this area.”

Supervisor Chris Schwartz said he did not think the mining operation fit with Black Hawk County’s 2028 energy plan.

“It’s a giant energy hog,” he said. “These economic promises here, I don’t buy them. This is not something I want to see in the community as we address climate change.”

The Grundy County MiningStore site uses 6 megawatts of power during operation, which is 24/7 unless part of the system is undergoing repairs or the site is powered down.

This amounts to about 54 million kilowatt-hours a year — equivalent to the energy used by about 4,900 houses.

Baric has said the MiningStore site can actually help the local power grid because it has an agreement with Grundy County REC to halt operations during peak usage times — such as 5 p.m. on a hot summer day. Because the utility doesn’t have to buy more expensive energy at peak times, it lowers the costs for all customers, he said.

The Black Hawk board voted unanimously against rezoning the land and asked for Planning and Zoning to bring forward a proposal to put a moratorium on large cryptocurrency mining sites in the county.

Baric declined to comment extensively about the vote, but said in a text: “It has been very disappointing to have two projects put on hold, which resulted in laying off seven full-time jobs in Iowa and remotes.”

The MiningStore has so far not proposed an alternate location for a second mining site in Grundy County, said Carie Steinbron, county zoning administrator. Tama and Marshall counties have not received applications to rezone land for crypto mining, said Todd Apfel, planning and zoning director for those counties.

Meanwhile, the value of a bitcoin has fallen from a high of more than $60,000 last fall to $24,000 last week.

Comments: (319) 339-3157; erin.jordan@thegazette.com

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