FILE – In this Wednesday, Aug. 20, 2014 file photo, Jon Rumion, background left, talks with Michael Cargill at Central Texas Gun Works in Austin, Texas. Bitcoin has crossed the $40,000 mark, extending on a huge rally that started three months ago, Thursday, Jan. 7, 2021. (AP Photo/Eric Gay, File)

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GRUNDY CENTER — About 8 miles west of here is a white Quonset hut that hums with the sound of industrial fans.

Unlike other rural outbuildings equipped with fans, this one doesn’t house hogs. It’s stacked with computers that spend all day and night working complex mathematical problems that create bitcoin, the most well-known cryptocurrency.

“I knew there was a place out there,” said Jill Krausman, owner of the Landmark Bistro in Grundy Center, who doesn’t know much about the site other than if an employee stops in for lunch. “I don’t have enough knowledge about it. It hasn’t affected me.”

The Cedar Rapids Gazette reports that this nondescript facility is one of the first — if not the first — large-scale cryptocurrency mining site in Iowa. But the company wants to expand with five more locations in Eastern Iowa, capitalizing on wide-open spaces, low property taxes and cheap electricity.

Cheap electricity is especially important because crypto mining uses a lot of juice. The Grundy County site uses more electricity than all the residential customers in Grundy Center, population 2,800, combined.

The industry’s massive energy use at a time when the world is trying to curb climate change should be a red flag to Iowa utilities and residents, said Kerri Johannsen, Energy Program director for the Iowa Environmental Council.

“There is a larger fundamental question about why we need to use energy in the first place to create cryptocurrency,” she said.

Bitcoin was created in the late 2000s, after the Great Recession, as a way for people to send money directly to each other without a bank or third party. Other cryptocurrencies, such as ethereum and litecoin, have followed.

Bitcoin transactions are verified and monitored by independent computers running a secure algorithm to solve blocks of numbers that represent groupings of transactions. These computers, or “miners,” race to solve each block with the payout being the next block of bitcoins, which is worth hundreds of thousands of dollars.

The Grundy County site is too small to solve blocks on its own, so miners there work as part of a mining pool that pays out a daily rate based on the amount of work, or “hashing” the computers do, explained J.P. Baric, founder and chief executive officer of the MiningStore, which owns the site.

“Bitcoin is important to me because it’s a monetary system that can’t be influenced by the government and it can’t be changed,” he said.

Baric, 24, dropped out of North Carolina State in 2017 to move to Texas — first Houston, then Austin, which he calls a “crypto mining heaven.” With his parents and grandparents, Baric invested $1 million to start the MiningStore, which owns and operates the Grundy County site as its flagship facility.

Right now, each of the site’s 1,900 computers mines $17 per day, but that amount fluctuates with the value of bitcoin. It’s been as high as $35 a day. But at current rates, the site makes about $32,000 a day. The power bill is over $5,000 a day, Baric said.

Baric found the Iowa site through a Colorado economic …….

Source: https://www.timesrepublican.com/news/todays-news/2022/05/iowa-cryptocurrency-site-eats-up-electricity/

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