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'They are taking over the Appalachians' | Crypto mining expands to East Tennessee, Southern Kentucky

At least eight cryptocurrency mines are operating in East Tennessee, in addition to one in Southern Kentucky.

NEW TAZEWELL, Tenn. — At night, Mikki Moondream Stump used to listen to the crickets and birds from the balcony of her Jellico home. Then, she said a light hum began to drown out the peace and quiet of her rural neighborhood.

"I left our big city because of that," she said. "I lived by the airport. I didn't want that hum. I didn't want that distraction."

She said the distraction comes from a new cryptocurrency mining site next to the former Jellico Motel.

Rows of machines inside gray boxes are working around the clock to validate Bitcoin transactions. 

"I send you one Bitcoin and you send him one Bitcoin. All these machines are doing are ensuring that yes, that's a legitimate transaction," said Scott Wade, head of operations for Exponential Digital, at a public meeting in February

Exponential Digital operates the Jellico crypto mining site, as well as ones in Tazewell, Oneida, Crossville and Decatur.

The mines' growing presence is raising objections among residents and concerns among elected officials, a 10News investigation found.

Wade told 10News that questions about the operations needed to go to PrimeBlock. Representatives from PrimeBlock have not responded to our requests for comment.

There are at least three other area crypto mines — in Maynardville, Knoxville and the Tri-Cities. 

Credit: WBIR
There are at least eight crypto mines in East Tennessee, as well as one in Southern Kentucky.

Wade said Exponential Digital is concentrating its cryptocurrency mining operations in the Tennessee Valley Authority region, which is why so many have popped up in East Tennessee.

"This is a new industry that is entering the United States, and our company is helping to facilitate setting these operations up," Wade said. "We chose TVA because of their great reliability and their power max and, obviously, their rates."

According to CNET, the first mine to verify a 'block' of Bitcoin transactions can earn a reward of around 6.2 Bitcoin, which is worth about $225,000. As more Bitcoins are created, the difficulty of verifying 'blocks' of transactions rises and rewards are halved roughly every 4 years. This is called 'Bitcoin halving.'

The first 'block' was mined in 2009 and earned the miner around 50 Bitcoin. The reward for subsequent blocks was halved in 2012 to 25 Bitcoin, and again in 2016 and 2020.

The supply of Bitcoin is limited to a final cap of 21 million, determined in the cryptocurrency's source code. The last Bitcoin is expected to be paid out in 2140, as the difficulty of producing more gets increasingly harder over the years and starts requiring more computational power.

Credit: CNET

Even if the mining operation succeeds, however, Claiborne County Mayor Joe Brooks said his community won't benefit.

"Absolutely not. Not a bit of that comes to Claiborne County," he said. "It will be taxed commercial. Other than that, there's no revenue to the county."

Brooks said the crypto mine employs a handful of people, although he's not sure whether any of them are local.

He said the crypto mine in Tazewell can use up to 20 megawatts of power a year. Studies estimate the industry as a whole uses as much energy as the country of Argentina.

Credit: BBC

The fans run 24/7 to prevent electrical fires because the computer servers are running so hard and so fast.

“That's not something that the Claiborne County volunteer fire department is able to handle," Brooks said. "We don’t have the proper stuff, without having to cut the breaker to put those [electrical] fires out."

He said Claiborne County relies on tourism because of its proximity to Norris Lake. The crypto mine sits atop a hill, visible from the main road on the road north to Tazewell. 

“It’s an eyesore," the mayor said. "It’s one of those things that, when you see it, you’re left with an impression of a beautiful landscape — and then that.”

Credit: WBIR

RELATED: Yes, you do have to pay taxes on cryptocurrency

Claiborne County can't do anything to stop the crypto mine because it doesn't have any zoning laws in place to regulate them.

"You're danged if you do and danged if you don't," Brooks said. "You're danged if you have zoning in place and you're danged if you don't have it in place."

In Campbell County, Mikki Moondream Stump said she feels her community was let down.

People told her there would be jobs, better internet and improved electrical services.

"Well, that didn't happen," she said. "You've taken our land and put this ugly thing right there. It's just not good for us."

Bitcoin, the largest and most popular cryptocurrency on the market, is often criticized as being extremely volatile with few federal regulations to protect investors. On May 10, the value of a single Bitcoin was around $31,000 — down from around $36,000 the previous Friday.

Experts with Chainalysis, a platform analyzing blockchain technologies, also said cryptocurrency crime hit an all-time high in 2021, with around $14 billion worth of cryptocurrency falling into wallets associated with hackers, fraud and scams.

    

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