Grundy County votes down rezoning for new cryptocurrency mining site

JP Baric, founder and CEO of MiningStore, delivers a brochure on power consumption to the Grundy County Board of Supervisors during a meeting on Monday, May 9, 2022. Baric opened a bitcoin mining site in the county in 2019 and is planning a second location. (Erin Jordan / The Gazette)

GRUNDY CENTER – The Grundy County Board of Supervisors voted Monday 4 to 1 not to reconsider the land to allow the development of a second mining county site in the county, but members told the developer that the council could admit a different place.

Barb Smith, an 18-year-old supervisor and developer herself, said she is not opposed to growth, but wants to know who is behind the projects she supports and make sure they do not infringe on other community development efforts.

“Speaking for myself, which is all I can do, my main reason for rejecting this was because of the location you chose and its proximity to Wolf Creek Park,” Smith said at the meeting at Grundy County Courthouse. “That doesn’t mean I or any of us would vote for something that was, in our eyes, in a more appropriate place.”

JP Baric, president and CEO of MiningStore, which opened one of the state’s first cryptocurrency mining sites eight miles south of Grundy Center in 2019, spoke with the board about the global benefits of bitcoin and the local benefits of its site, which employs 9 people and brings visitors who stay at local hotels and eat at local restaurants.

But without the approval of a future site, “those people will no longer come to the Grundy Center, but will go elsewhere,” he said.

First site in Iowa

Bitcoin was created in 2009 as a way for people to send money directly to each other without a bank or a third party. Other cryptocurrencies followed, such as ethereum and Litecoin.

Bitcoin transactions are verified and monitored by standalone computers that run a secure algorithm to resolve blocks of numbers representing groupings of transactions. These computers, or “miners,” run to solve each block, with payment being the next block of bitcoins, worth hundreds of thousands of dollars.

Magnus Anderson, MiningStore site manager, shows the components for the company’s mining machines on Tuesday, April 19, 2022 at the MiningStore bitcoin mining facility in Grundy Center, Iowa. (Geoff Stellfox / The Gazette)

Baric, 24, of North Carolina, and his family have borrowed his family business and home to raise $ 1 million to set up a server farm, most of them housed in a white Quonset hut in the middle of the fields. of Iowa corn.

He arrived in Iowa after meeting Jim O’Regan of Hudson, who is the CEO of Heartland State Economic Development Group, a nonprofit organization founded in 2014 that had $ 71,500 in assets in 2020, according to Guidestar. org. .

“Jim convinced me that Iowa was the right place,” Baric said when he met O’Regan at a cryptographic convention in Denver.

Energy use

O’Regan helped find the right place for the MiningStore: right next to an electrical substation owned by the Corn Belt Power Cooperative.

Heartland has bought the land and has an agreement with the Grundy County Rural Electricity Cooperative, one of nine rural electric cooperatives and a municipal cooperative that owns Corn Belt, O’Regan said at the meeting.

The Grundy County REC has the cheapest industrial electricity in the state at 4.05 cents per kilowatt-hour, according to files with the Iowa Utilities Board.

The MiningStore site uses 6 megawatts of power during operation, which is 24 hours a day, 7 days a day, unless part of the system is under repair. That’s about 54 million kilowatt-hours a year, or the equivalent of about 4,900 homes.

Many environmental groups have questioned whether the benefit of cryptocurrency is worth its energy appetite.

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

But Baric said the MiningStore site can actually help the local power grid because it has an agreement with the Grundy County REC to turn it off during peak hours, such as 5pm on a hot summer day. As the company does not have to buy more expensive energy at peak times, it reduces costs for all customers, he said.

Educating Iowans

Baric admitted that he did not do a very good job talking to the people of Iowa about the cryptographic mining site. Supervisor Mark Schildroth asked Baric why they had started working in second place before the vote on the repartition.

“We had the impression that the site was good when the landlord signed a lease with us,” Baric said.

Smith and two other supervisors said the place was too close to the Wolf Creek recreation area, a 93-acre camping, hiking and hunting area. The council recently decided to invest money to relieve COVID of improving the park, Smith said after the meeting.

“Once they get the reasoning, they can do whatever they want and it could be objectionable to campers,” he said.

O’Regan said a new site they have in mind would be twice the park and would have a hill and trees in the middle. It is unclear when that proposal would reach the Grundy County Planning and Zoning Commission.

But some Iowa residents are already in agreement with the expansion of the project.

David Jones, a 30-year-old from Marshalltown, said he is one of 1,000 people investing in the MiningStore through social media influencer Josh Terry. Jones, who attended Monday’s meeting, said he bought his first bitcoin in 2020 and believes the cryptocurrency will grow in value.

“It’s three times what it was then, but less than half of what it was at the top,” he said. “We’ll see what happens in the future.”

JP Baric, founder and CEO of MiningStore, is photographed after a meeting of the Grundy County Board of Supervisors on May 9, 2022. (Erin Jordan / The Gazette)

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