Blockchains LLC wants us to trust it. The company is asking the legislature for its own governmental utopia in the Nevada desert 20 miles east of Reno – free of the rules that our state’s 17 counties currently live by. The company has the backing of the executive branch, some of the state’s most powerful lobbyists, money for campaign coffers, and a wish-list of ways to exempt itself from standards of local governance.
What Blockchains needs more than anything else, however, is water. It got into the farming business just south of Gerlach. But that’s a short-term play if the company ultimately gets what it wants.
Blockchains LLC owns 67,000 acres of land at the Tahoe Reno Industrial Center (TRIC), a high desert landscape with an aquifer that has no excess water left to give and no major rights on the nearby Truckee River. State and local officials lured companies like Tesla, Switch and Walmart in Storey County with tax breaks, cheap land, and just enough water to get by. Until Blockchains, no one envisioned the rolling hills of TRIC nestling a hamlet for the highnesses of high-tech. The northeastern region of Storey County is not an Eden-in-waiting –– largely because there isn’t much water.
Thanks to a bombshell story from the Nevada Independent’s Daniel Rothberg, we’ve learned that Blockchains attempted to solve its water problem with some cold hard cash –– paying $35 million for 2.4 billion gallons of annual water rights that exist underground not too far from Pyramid Lake. That region is a 100-mile jaunt from TRIC. A massive pipeline would be necessary.
Moving water that far is a big trust issue. Another issue, as one of Blockchains lobbyists recently told the New Republic: The company doesn’t even have rights to all the water it wants despite the recent acquisition.
Depending on which TEDx talk you watch on YouTube, it is hard to know what Blockchains actually does. Some say Blockchains is a digital asset management tool based on a system of “trust-less” ledgers for accounting. Others describe it as a public registry of who’s who and who owns what on a secure, peer-to-peer system. Some might say it is a vector for cryptocurrency like Bitcoin or Stablecoin.
A bill proposal from Governor Sisolak that would allow Blockchains to create a new government entity –– an Innovation Zone –– within Storey County is a roundabout way of asking the public and lawmakers to trust it. The Innovation Zone would be a community with a Blockchains Board of Supervisors to govern schools and other social functions. Some have referred to it as a company town. Others describe it as a so-called smart city. Illustrated renderings show Jetson-like buildings and even green lawns at this proposed paradise that would be just off I-80 –– in and around the Tahoe Reno Industrial Center.
This all sounds nice, but right now the pitch really feels like speculation. The promise of Blockchains, its city and its technology is a big one to fill – especially considering the absence of water for a desert city.
Massive water transfer projects trigger provisions in Nevada law related to the public trust, environmental soundness, and the future of the basin that’s losing its water.
The water Blockchains bought flows belowground between the San Emidio Basin, Hualapai Flat Basin, Winnemucca Lake Valley and others –– ultimately ending in the Pyramid Lake Basin.
As Rothberg reported, Blockchains bought the water late last year from Sonterra Development Company LLC, which had only acquired the water in 2017. Four years ago, Sonterra bought water rights from farmers in the region and continued irrigating crops. What crops don’t consume or what fails to evaporate goes back in the ground and replenishes the groundwater table. The water also grows food and shelters wildlife.
If all the water goes in a pipeline, there will be no more recharge or other benefits from the current uses. It will all be going somewhere else. Blockchains’ water currently exists in basins that are already over-allocated – meaning there is more water on paper than in the ground. Sucking such large quantities to other places could propagate water table drawdowns in the immediate area and in surrounding basins — one of the biggest fears is the effect on Pyramid Lake.
The intentions of Sonterra were predicted long ago. In 2007, the company filed applications to appropriate water in the San Emidio Basin and others in order to transport the water to far away reaches of Storey and Lyon Counties for urban sprawl.
Nevada officials rejected those applications on the grounds that the purported use was speculative in nature. Sonterra couldn’t predict how many people would be packing up to live near Silver Spring and how many businesses would flock there.
Developers can make big promises. So can tech companies. We shouldn’t blindly trust folks we don’t know (Remember Faraday?).
Blockchains is probably best associated with cryptocurrency – which by its very nature is speculative. Cryptocurrency produces nothing and has no practical use just yet. People merely invest in the idea and hope to cash in one day. For better or worse, we can say the same for much of what Blockchains is trying to sell us – though some of its technology is currently in some sectors. That doesn’t entitle it to exemptions from local government or access to our public waters.
What Blockchains needs is legitimacy i.e. government buy-in. Yesterday, Governor Sisolak joined with GOED’s Executive Director Michael Brown on YouTube to pitch the economic development benefits of the Innovation Zone concept that would create the “Blockchain Technology Center of the World.” They asked Nevadans to keep an open mind regarding upcoming legislation.
Additionally, we are also seeing a number of bill proposals this session –– from elections to financial issues –– attempting to indoctrinate the technology into the fabric of our state and testing the receptiveness of state lawmakers asked to vote on Blockchains issues.
Nevada could grow to trust Blockchains. But we must wonder: If a company touting world-changing technology is so smart, you would think that it could afford to develop a city in a place with more water.
Editor’s note: The Sierra Nevada Ally is inviting local writers to pen approved opinion columns for the publication. We invited Kyle Roerink to write columns on natural resource issues throughout Nevada and the West. Kyle is the executive director of the Great Basin Water Network. He lives in Reno. Support his writing.
The opinions expressed above are not necessarily those of the Sierra Nevada Ally. Our newsroom remains entirely independent of our opinion page. Published opinions further public conversation to fulfill our civic responsibility to challenge authority, act independently of corporate or political influence, and invite dissent.