In the quiet farmlands about 8 miles west of Grundy Center, Iowa, a modest white Quonset hut emits a constant hum. But inside, it’s anything but rural tradition. This unassuming structure houses 1,900 high-powered computers working around the clock to mine bitcoin, one of the world’s most prominent cryptocurrencies. Unlike typical farm outbuildings cooled by industrial fans, this site isn’t raising livestock—it’s generating digital currency at an energy cost that surpasses the entire residential electricity use of Grundy Center’s 2,800 residents.
Owned and operated by MiningStore, a company founded by 24-year-old entrepreneur J.P. Baric, this facility is one of the first large-scale cryptocurrency mining operations in Iowa. With plans to expand into five additional Eastern Iowa locations, the project raises urgent questions about energy consumption, grid sustainability, and the long-term economic and environmental trade-offs of digital currency production.
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How Bitcoin Mining Works
Bitcoin emerged in the aftermath of the 2008 financial crisis as a decentralized alternative to traditional banking. Instead of relying on central institutions, transactions are verified through a global network of computers using a process known as proof of work. These computers—called miners—race to solve complex mathematical puzzles that validate blocks of transactions. The first to succeed earns newly minted bitcoins as a reward.
The Grundy County site doesn’t operate independently; it contributes computing power to a mining pool, where rewards are distributed proportionally based on each participant’s share of computational effort, or “hashing.” While individual returns fluctuate with bitcoin’s volatile market value—currently averaging $17 per machine per day—the facility generates roughly $32,000 daily. However, this comes at a steep operational cost: over $5,000 per day in electricity alone.
For Baric, the appeal lies in bitcoin’s resistance to government control. “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.
Energy Demand: A Growing Concern
The MiningStore facility consumes 6 megawatts of power continuously—equivalent to the annual electricity usage of approximately 4,900 average Iowa homes. To put this in perspective, Luther College, home to 1,800 students, uses just 2–2.8 megawatts annually.
Grundy County Rural Electric Cooperative (REC) provides the power at a rate of 4.05 cents per kilowatt-hour, among the lowest industrial rates in the state. This affordability was a key factor in Baric’s decision to locate here. The site sits adjacent to an electrical substation, receiving power via a 1,500-kilowatt underground transformer.
As part of its agreement with Grundy County REC, MiningStore commits to temporarily shut down operations during peak demand periods—typically hot summer days—acting as a flexible "load vessel" for the grid.
“This isn’t just about one facility,” said Kerri Johannsen, Energy Program Director at the Iowa Environmental Council. “We need to ask: Is this the best use of our energy resources?”
Her concern is echoed by Jim Martin-Schramm, emeritus professor at Luther College: “Cheap energy attracts energy-intensive industries. But we must consider whether we’re prioritizing sustainable development.”
Where Does the Power Come From?
The electricity powering the MiningStore comes from Corn Belt Power Cooperative, a generation and transmission cooperative owned by nine rural electric cooperatives and one municipal utility. In 2019, Corn Belt’s energy mix was approximately:
- 50% coal
- 18% purchased power
- 15% renewable sources
- Remaining shares from natural gas, hydro, and nuclear
Despite visible wind turbines near the site, they are owned by MidAmerican Energy and do not supply power to the mining operation.
Since the MiningStore began operations, Grundy County REC’s commercial and industrial electricity sales have more than doubled—from 16.5 million kWh in 2018 to 36.9 million kWh in 2020—largely due to the facility’s massive draw.
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Environmental and Economic Implications
While proponents highlight job creation—MiningStore employs nine full-time staff and hires local electricians—critics question whether such economic benefits justify the environmental cost.
Environmental advocates argue that proof of work mining is inherently unsustainable. A coalition called Change the Code Not the Climate advocates shifting to proof of stake, a consensus mechanism that could reduce energy consumption by up to 99%.
“Cryptocurrencies are too volatile to function as real-world currencies,” noted Jon von Tetzchner, CEO of Vivaldi Technologies. “They’ve become speculative assets dependent on perpetual demand growth.”
This raises concerns about long-term viability: value depends not on utility, but on belief in future appreciation—a dynamic vulnerable to market collapse.
Expansion Plans and Community Response
Baric aims to open four more facilities across Eastern Iowa—in Black Hawk and Tama Counties—capitalizing on low land costs, tax incentives, and abundant power. However, expansion faces regulatory hurdles.
The Grundy County Planning and Zoning Commission has recommended denying a zoning change from agricultural to commercial for a proposed second site. A public hearing is scheduled for May 9 at the Grundy County Courthouse.
“We haven’t been approached directly by the company,” said Supervisor Lucas Halverson. “We want to hear from the public and understand both benefits and risks.”
Baric plans to attend and emphasize MiningStore’s contributions: tax payments, local employment, and educational outreach like school tours on blockchain technology.
State Policy and Oversight
Currently, the Iowa Economic Development Authority does not offer incentives for cryptocurrency mining nor track such operations. Spokeswoman Kanan Kappelman confirmed no formal data collection exists.
Johannsen argues this should change: “If we’re facing significant load growth from crypto mining, the state needs visibility and planning capacity.”
Without oversight, unregulated expansion could strain regional grids and undermine renewable energy goals.
Frequently Asked Questions
Q: How much electricity does the MiningStore facility use annually?
A: Approximately 54 million kilowatt-hours per year—equivalent to nearly 5,000 average Iowa households.
Q: Does bitcoin mining use renewable energy in Iowa?
A: Not directly. Although wind turbines are visible near the site, they’re owned by MidAmerican Energy and do not supply power to the MiningStore.
Q: Is cryptocurrency mining legal in Iowa?
A: Yes. There are no state laws banning cryptocurrency mining, though zoning and energy regulations may apply locally.
Q: Can bitcoin mining help stabilize the power grid?
A: Potentially. Facilities like MiningStore can act as flexible loads, reducing demand during peak hours—a benefit utilities may leverage in grid management.
Q: What is proof of stake vs. proof of work?
A: Proof of work requires massive computing power to validate transactions (used by Bitcoin). Proof of stake selects validators based on the number of coins they hold and are willing to “stake” as collateral—using far less energy.
Q: Are there jobs created by crypto mining in rural Iowa?
A: Yes. The Grundy County site employs nine full-time workers and contracts local electricians, offering new opportunities in areas with limited industry.
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The Road Ahead
As cryptocurrency mining grows in rural America, communities face tough choices between economic development and environmental stewardship. While low-cost energy makes Iowa an attractive hub for digital innovation, policymakers must balance short-term gains with long-term sustainability.
For now, the hum of servers in Grundy County serves as both a symbol of technological progress and a warning: innovation without accountability risks consuming more than just electricity—it may drain public trust and planetary resources alike.
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