On Monday night, the Chehalis City Council heard a presentation on cryptocurrency given by Justin Podhola, a cryptocurrency mining entrepreneur who started his company, Elite Mining Inc., in Chehalis.
The council later voted unanimously to adopt a moratorium on cryptocurrency mining in Chehalis.
Podhola has been involved in cryptocurrency mining for eight years after investing all of his life savings, he said. After his presentation, Podhola answered questions about different aspects of the cryptocurrency business.
Podhola explained how in cryptocurrency, there are good and bad actors, listing those interested in performing illicit transactions as being the type of people he’d consider bad actors.
“Just like anything else you gotta have regulation around it,” Podhola said.
Podhola told the city councilors cryptocurrency miners make money by selling the cryptocurrency they mine. Podhola’s company mines Bitcoin in exchange for U.S. dollars. According to Podhola, Bitcoin, which was the first cryptocurrency created, is the best cryptocurrency because it developed organically. The amount of money a miner makes is determined by how much they contribute to the mining of a cryptocurrency.
“The more power I contribute to the Bitcoin network, the more money I make,” Podhola said.
Podhola’s company contributes to the Bitcoin network through computers his company has that work with other cryptocurrency miners to solve complex mathematical equations. The greater share your computers contribute to solving the equations, the greater share of the cryptocurrency the miner receives. The cryptocurrency mining process can be lucrative, but there are major problems, mainly high consumption of water and electricity.
Podhola said he’s already run into those problems. He told the council he purchased a building next to the current Washington State Employee Credit Union (WSECU) and PUD near Yard Birds but wasn’t able to get enough power to meet his business needs. Podhola said he moved his company to Wyoming, though he still maintains operations in Chehalis at his location near WSECU as well as a more recent expanded operation in Yard Birds.
The goal of the newly passed moratorium is to find a way to allow cryptocurrency mining companies to operate without having to worry about power blackouts.
Asking about power usage, Councilor Isaac Pope used Microsoft as an example of another company that uses a lot of power to run computers and asked why cryptocurrency companies would be singled out.
In response to Pope’s question, Podhola explained the importance of the government working with cryptocurrency miners, particularly given the consistency of the power cryptocurrency mining uses. Podhola used Texas as an example to explain to the councilors how electricity prices can be set in a way so as to discourage cryptocurrency mining at certain times to prevent blackouts.
Councilor Bob Spahr asked Podhola a question about the possibility of zoning disincentivizing cryptocurrency mining. Podhola answered by saying appropriate zoning that factored in water and power usage wouldn’t discourage companies like his from engaging in cryptocurrency mining.
After newly appointed Councilor Kevin Carns asked about the nature of Podhola’s employment activities, Podhola said he employed a handful of workers in Chehalis who are paid around $20 to $30 an hour, adding he plans to expand his operations in Chehalis if allowed.
Later during the meeting, after the council had finished hearing public comments, Spahr moved to vote on the cryptocurrency mining moratorium and was seconded by councilor Jerry Lord. The council then voted unanimously to adopt the moratorium.