Bills passed in the Arkansas Senate this week that would amend the Arkansas Data Centers Act of 2023, which opened the door for cryptocurrency mining in Arkansas, are expected to be heard in the state House of Representatives Thursday.
Senate Bill 78 from Joshua Bryant (R-Rogers) and SB 79 from Missy Irvin (R-Mountain View) would address unintended consequences that arose from the influx of “crypto miners” in the state following passage of the 2023 law, which essentially provides for cryptocurrency harvesters the same protections afforded to data centers and protects them from local enforcement of things like noise enforcement.
Arkansas is an attractive destination for miners because land is relatively cheap and some of the mines take up a lot of space. Most of the harvesting centers are not making noise and go unnoticed by members of the communities in which they are located. In the year since the law was passed, though, Arkansas lawmakers have been inundated with complaints and concerns over intrusive levels of noise emanating 24/7 from fans cooling the banks of servers housed at crypto mines, about possible ties to unfriendly foreign governments such as communist China and possible strains on the energy grid.
Crypto mines are large banks of computers that run continuously as they process cryptocurrency transactions, and a couple of them have caused a stir in Arkansas. One in the Bono community sits adjacent to a private landowner, is uncovered and its ownership has been traced to China.
Not all crypto mining centers in the state produce the intrusive, non-stop noise, and one Arkansas group wants to “set the record straight” about crypto mining. Crypto mining represents a great opportunity for Arkansans and crypto itself such as Bitcoin may even represent the currency of the future, said Ben Smith, president of the Arkansas Blockchain Council.
“Crypto represent a real investment in Arkansas, in America,” he said. “The legislation from Sens. Bryant and Irvin will address the concerns people rightfully have.”
The House on Wednesday is expected to suspend its rules to consider non-budgetary bills in a fiscal session, therefore declaring an emergency, before an expected House committee hearing on Thursday. SB 78 would impose noise limits and require mine owners to install extensive soundproofing measures, require all mines to be covered, ban the use of water to cool servers and bar citizens of countries listed in the International Traffic in Arms Regulations from owning crypto mining operations in Arkansas.
SB 79 would add more soundproofing measures as well as requirements for a minimum distance from nearby structures and bar ownership by certain foreign nationals from International Traffic in Arms Regulations countries.
Smith said the concerns about energy use are not warranted. “Entergy is not making excess power for us,” he said, adding that miners are under contract with Entergy to shut down during peak power needs. “We find where there is unused power and we purchase it from Entergy.”
Smith said most mines cause no problems for local residents and represent a potential economic windfall for the state as well as local residents.
“The projected tax revenue for the state off the use of the power cells alone need to run the servers in Arkansas is $7.2 million a year,” he said.
Longtime central Arkansas automobile dealer Steve Landers Jr., a local crypto proponent and member of the blockchain council, is a mine owner. He said his goal is to help make cryptocurrency available to “more than jut a select few” as both a business and investment opportunity.
“We plan to offer units to the general public so that more people can see and understand the value of this technology,” he said. “The biggest problem is the lack of education and knowledge on the subject. Everybody in Arkansas needs to be involved because it may represent the future of our currency. Everyone thought the internet was a fad when it started.”
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