Montana’s cryptocurrency zoning law could be the country’s first – GovTech

(TNS) – At a meeting of commissioners last month, Missoula County put pen to paper on a permanent largely environmental cryptocurrency-related zoning law that they say is the first of its kind in the country.

Sure March 25, the Missoula County Commissioners voted to pass zoning bylaws for cryptocurrency mining operations aimed at sustainability and the county’s clean energy goals for 2030. The county has not met any crypto mining regulations – Currency regarding climate change during a nationwide comprehensive review of zoning laws.

Missoula County Officials believe it is one of the first counties in the country to pass cryptocurrency mining ordinances dealing specifically with climate change.

“I think the zoning Missoula County is about to adopt is one of the first that really addresses the climate change impacts of cryptocurrency mining, and so we’re very excited about it, ”said Jennie Dixon , a senior planner of county planning and community services, on March 25.

Cryptocurrency mining operations, which are a type of digital asset recovery, use huge amounts of energy.

The county pushes the Missoula County urban area towards 100% clean energy by 2030. The new zoning law regulates the location of mining operations, the type of energy that the industry can obtain and what it has to do with its waste.

Hyperblock LLC, a former cryptocurrency mining operation in Bonner, at one time, used as much energy as a third of all households Missoula County at any given time. When operational, Hyperblock had 20 megawatts of capacity.

“We are committed to using 100% clean electricity in our Missoula urban area by 2030, “county commissioner Dave strohmaier said to Missoulian recently. “And the last thing we wanted to do was see all of the industries in our county go in the opposite direction and set those goals backwards.”

‘A global crisis’

Diana maneta , the county’s sustainability program director, and Dixon have been at the forefront of zoning bylaws.

The topic was discussed at many county meetings for years, which ultimately led to the formation of the Cryptocurrency Zoning Project. The orders they helped develop have been in the works since 2018, when they began to thoroughly research the subject.

At the start of the process, five major topics concerning mining operations were discussed: electronic waste, noise, climate impacts, fire safety and the impacts of the public electricity network.

The latter two eventually lost their importance as concerns around them faded.

The county worked quickly on some basic proposals and Missoula County adopted emergency interim zoning rules in 2019, which served as the basis for the regulation as it evolved.

Given the county’s broader targets for energy consumption, climate impact has become a major focus. Burning fossil fuels releases carbon dioxide into the air, contributing to Earth’s climate change.

“Climate change is a global crisis that we must resolve and we simply cannot turn a blind eye to these impacts on our communities which could lead us in a different direction from an energy use perspective,” Strohmaier said.

Early 2019, Hyperblock said he wanted to increase to 60 megawatts of capacity at any time. NorthWestern Energy produces around 1,600 MW per year. At one point, statewide cryptocurrency plans North West received would have totaled around 1,000 MW, Maneta said the company.

When the provisional energy rules have entered into force, Hyperblock should have procured clean energy for any further expansion. The company obtains its electricity from Energy Keepers, which is part of the Confederate Salish and Kootenai Tribes, and had worked with Hyperblock and its predecessor in the same place, Spokane LLC Project.

Energy Keepers recently entered into an agreement with Hyperblock after the power company claimed in a lawsuit, he owed him $ 3,691,604 plus interest.

The county argued that the laws were not aimed directly at Hyperblock and actually hosts cryptocurrency mining operations in Missoula County.

Energy intensive

Cryptocurrency miners are rewarded for their energy investments because they use a lot of electricity.

The basic process of mining digital currency involves having a special type of computer try to solve what is essentially a combination of random numbers that helps provide a layer of security for crypto transactions. change.

Operators around the world are trying to update the register of all transactions for a cryptocurrency. The fastest to solve the problem and update the global ledger is rewarded with a piece of digital currency.

To obtain it, minors must have proof of work.

“The proof of work, what you prove to be part of the system is that you have invested a lot of money in the form of computational capacity and most importantly energy to be part of the system,” Maneta said. “The fact that it’s so power hungry isn’t exactly like a side effect, the whole point of the proof of work system is to show that you put a lot of energy into it.”

Replacement machines and upgrades to better machines were also issues. These new permanent Missoula County companies dispose of electronic waste – commonly referred to as electronic waste – which includes discarded electrical devices.

As part of its commitment to fight climate change, the electronic waste generated must be recycled through a Department of Environmental Quality waste recycling company.

Noise was another issue, which was discussed at length in July 2018. The Bonner the mining operation was forced to replace 144 fans after locals complained about the noise.

Under the new zoning laws, facilities can only be present in light industry and heavy industry districts.

Regarding the last two points, it was best understood that large cryptocurrency miners rarely overtax machines to the point of overheating, Maneta said.

Utility companies the county has worked with, including NorthWestern Energy, were also not concerned with their ability to have service issues associated with increased power demand.

The county took a deep look at fires caused by overheating machinery and even considered fires caused by overtaxed transformers and other parts of the power grid that may have had the potential to spark.

Driven by cheap energy

If a new cryptocurrency mine will settle in Missoula County that remains to be seen.

Cheap energy is the main reason cryptocurrency operations have flocked Montana and western Washington in recent years. Other areas of major cryptocurrency mining include China and the Republic of Georgia.

One of the most commonly mined currencies is Bitcoin, which is currently worth around $ 56,257 per Bitcoin. A year ago this time, a Bitcoin was worth around $ 7,000. Bitcoin also peaked in December 2017 at around $ 19,000, which sparked much of the original conversation about the need for tighter zoning regulations.

“As the price of Bitcoin increased, mining became more lucrative, it became more competitive and people started doing it on a larger scale,” Maneta said. “They started to realize, ‘Hey, if I got to a place where the electricity is really cheap and, oh the climate is cool, because otherwise my computer is going to overheat, then I can make a lot of money by doing it. doing that. ‘ ‘

Montana has cheap energy, much of which is renewable. In 2019 data, North West said 61% of its total production was carbon-free.

Other areas in Montana have seen significant interest in mining cryptocurrencies. FX Solutions, formerly CryptoWatt, operates 35,525 nearby servers Butte.

If another operator came to Missoula County, the rules are now clear.

“We’re probably not the first place people think of to call, although we do have an important place in the licensing process,” Dixon said. “So it’s a good idea to call and find out what the zoning requirements are.”

Maneta added: “We spoke with several people who were considering mining cryptocurrency in the county and they had questions on how to make sure they understood what the county regulations entailed and we got them. spoke in particular of renewable energy requirements.

“So we have discussed at length and provided a lot of information about these to people who are considering doing so.”

(c) 2021 Missoulian, Mont. Distributed by Tribune Content Agency, LLC.

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