City ends crypto-mining ban

Ryan Brienza, CEO of Zafra LLC, stands in front of a BitBox, a device invented by his company that captures the heat radiated by cryptocurrency-mining devices. Brienza said he has talked about using the device to heat City of Plattsburgh buildings, such as the Crete Memorial Civic Center.

PLATTSBURGH — The city has lifted its nearly one-year-long block on new or expanding cryptocurrency-mining operations.

Implemented in March 2018, that ban was to last no more than 18 months and was put in place to buy the City of Plattsburgh time to solve issues related to the virtual-mining operations. 

These miners contributed to a city-wide energy increase in January 2018 that upped residential bills by over 6 percent and sparked concerns for electrical safety, high heat levels, worker heat and ventilation and noise. 

A fresh New York State Public Service Commission tariff structure, known as Rider A, made mining operators responsible for quota-overage costs, and a local law, passed October 2018, tackled the remaining issues. 

But still, the moratorium remained intact — until Thursday night. 

The Common Council voted to lift that moratorium at its regular session, allowing new operations to enter the city and existing operations to expand. 

Councilors Rachelle Armstrong (D-Ward 1), Mike Kelly (D-Ward 2), Elizabeth Gibbs (D-Ward 3), Patrick McFarlin (I-Ward 5) and Jeff Moore (D-Ward 6) voted in approval, while Councilor Peter Ensel (R-Ward 4) voted against. 

PLEASED

Local miner Ryan Brienza, who attended the council session, was excited to hear the news. 

Brienza's company, Zafra LLC, is a virtual-mining hosting service located in the City of Plattsburgh, and he said the moratorium has kept his company from expanding. 

"I'm just looking forward to hitting the ground running tomorrow," the CEO said after the meeting.

SHARING HEAT

Though the city's Local Law P-7 of 2018 requires these operations to recycle some 80 percent of their generated heat — dependent upon weather conditions — Brienza says he already has that problem solved.

The 19-year-old entrepreneur invented the BitBox to do the trick. 

Brienza said his invention can recapture the generated heat from these operations and he has talked about using it to heat city buildings, such as the Crete Memorial Civic Center on Beach Road. 

"I have to figure out and work with the (Common Council) on how we can implement these boxes into certain buildings," he said after the meeting.

"I want to start with a beta, or a test, to sort of prototype the BitBox somewhere. And then reach out and try to potentially expand our current operation at the building we're in now and then maybe to some other locations."

NOISE REGULATIONS

Moore introduced a potential law on noise at the meeting as well. 

That local law, to be discussed at a public hearing on Thursday, March 14, would take the place of the city's current noise ordinance. 

Though cryptocurrency-mining operations would be subject to its regulations, the noise ordinance would apply to businesses and residencies city-wide.

Local Law P-7 of 2018 — specific to cryptocurrency-mining operations — addressed issues of noise, but some councilors didn't think it was thorough enough. 

That law says noise levels for cryptocurrency-mining operations cannot exceed 90 decibels at a distance of 25 feet from the containment structure’s exterior. 

The suggested noise ordinance defines different sound-level allowances for daytime versus nighttime; the decibal levels also vary based on zoning, including industrial, commercial and residential.

Under the proposed law, a commercial operation could not exceed a noise level of 70 decibels, with measurements taken at the property line, from 7 a.m. to 9 p.m. 

From 9 p.m. to 7 a.m., the allowed noise level would decrease to a max of 65 decibels. 

COOLING FANS

But Brienza isn't concerned about these regulations, either. 

The CEO said the noise at his operation comes from the fans that are used to cool down the mining machines. To meet the potential sound regulations, Brienza said, his company would transition to liquid cooling. 

“We’d be using water to cool the miners, or at least that’s what our BitBox would be using,” he had previously told The Press-Republican. 

“That cools down the miners instead of just using exhaust fans.”

As of Thursday night, Brienza said this was still his plan.

ENERGY CONCERNS

Ensel, who voted against lifting the moratorium, said that even with the potential of a new noise ordinance, he still wasn't on board with the virtual-mining operations. 

With these miners using so much energy, the Ward 4 councilor wondered if they would block the municipality from future opportunities that also need energy.

At last month's Municipal Lighting Department meeting, MLD Manager Bill Treacy said the city's largest cryptocurrency-mining operation uses about 11.5 megawatts, while other companies in the city, such as Bombardier Transportation, use only a fraction of that.

“You could probably count on one hand the number of people (the cryptocurrency miners) have working for them," Treacy had said.

Ensel said that sort of data is worrisome.

"It could inhibit our ability to bring in another industry or any other manufacturers that actually could create jobs," he said after the council meeting.

Email McKenzie Delisle: 

mdelisle@pressrepublican.com

Twitter: @McKenzieDelisle 

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