In a nondescript warehouse near the intersection of U.S. 2 and Montana 206 in Columbia Falls, a new mine has quietly come online.
Rather than gold or silver, this above-ground operation is mining bitcoin and other forms of digital currency. Inside, the dull roar of fans drowns out all other noise as they work to cool more than 1,000 servers working at a breakneck pace to complete the complex equations necessary to harvest digital currency.
The building is the first digital currency mine of its scale in the Flathead Valley. It sits on property that was purchased as a vacant lot earlier this year by Flathead Valley resident Jeff Russell and his business partner Don Kinser, who is based in Georgia.
Russell and Kinser are co-owners of Columbia Mountain Holdings, which owns the property and building, and Teakettle Mining, one of two companies leasing space and services in the mining facility.
Columbia Mountain Holdings maintains and leases out space in the facility and does basic maintenance for people who want to have a computer server known as a “miner” working to earn them digital currency.
“Bitcoin is the main thing we mine,” Russell said. “We basically lease the space to the miners.”
Bitcoin is widely considered to be the first of now many cryptocurrencies — digital currency that only exists online. It is not regulated by any government or administrative entity, but maintained through a communal digital ledger that records all transactions. Transactions are processed on the ledger through a process called “mining,” in which hardware such as that at Columbia Mountain Holdings perform complex math problems. Mining accomplishes two tasks: maintaining the communal logbook and producing more bitcoin. Bitcoin is considered a speculative investment, as its value wildly fluctuates depending on the market.
Columbia Mountain Holding’s building, once complete, will be able to house about 2,300 active miners. Right now, it is mostly done and has about 1,500 miners in operation. Most miners are going for around $800, but Russell said that number can fluctuate with the highly volatile market for the currencies.
Teakettle Mining has about 384 servers in the space, while the rest are leased by another company. Both Teakettle and the other company sublet their space to a greater variety of renters. In fact, Russell is his own client and rents space in the facility from Teakettle Mining.
“There are two large tenants of this facility,” Russell explained. “We happen to own one of them. Those two large tenants contract with other, smaller clients.”
Russell said that while the business has so far been successful, they started it largely because he and his business partner, both engineers, found the challenge of building a facility capable of handling the operations alluring.
Bitcoin mines in other parts of the state have met some pitfalls. The Missoula Independent reported earlier this year that some Bonner residents have complained that a nearby mining facility comes with a constant high-pitched whirring of fans that they say have an adverse impact on quality of life and wildlife corridors.
Russell said those impacts were on their minds when they designed the Columbia Falls building, and while one needs noise-canceling headphones on to peruse the corridors of servers and fans, no noise is audible from the parking lot.
One of the main challenges of cryptocurrency mining is the large amount of electricity it takes. Russell said this made western Montana, with its abundance of cheap electricity due to a wealth of hydropower, a great option. It is also easier to keep the building cool in Montana’s dry, cool climate. The Columbia Mountain facility uses about 3.8 megawatts of electricity when operating at full capacity.
“Having a cool climate most of the year really helps,” Russell said. “What we have to do is make sure that hot air doesn’t go back in, but goes out. If you don’t keep them cool, they don’t work.”
He said Flathead Electric was great to work with while constructing the building, but as they look to expand they will need to do it elsewhere because they can’t tap any more power from the grid here.
“We’re already looking at some other sites,” Russell said. “We do use quite a bit of electricity.”
All the space in the current mine is already leased out, but as Russell and his partner expand their business to include new buildings in other parts of the state or country they will have more space available.
More information can be found on the Teakettle Mining website at www.teakettle.io.
Reporter Peregrine Frissell can be reached at (406) 758-4438 or firstname.lastname@example.org.