August 31, 2021 |
James Messi
China’s unprecedented clampdown in its technological sector in November expanded in May, encompassing the world of Bitcoin. It appeared to have lost interest in cryptocurrency, despite being the world’s largest bitcoin mining country. Now, various crypto mining companies have migrated to Texas, a state in the United States of America.
Texas: An Ideal Home
Texas is seen to be the perfect place for cryptocurrency mining. The state offers tax incentives for technological companies. It is home to some of the world’s cheapest energy prices, and is known to expand its renewable energy sector. In 2019, the state started to get 20% of its power from wind energy. Energy consumers here are free to choose between power providers due to deregulation in its power grid.
The state was also fortunate enough to have political leaders who are openly pro-crypto. Its governor Greg Abbot could not contain his excitement to have cryptocurrency mining companies in his jurisdiction, even tweeting how thrilled he was of the prospect of Texas being the next “crypto leader”.
People are beginning to see cryptocurrency kiosks in the state’s grocery stores.
While Texas has natural advantages and a crypto-friendly political environment, it is important to note that there is more behind the decision of going thousands of miles for Bitcoin’s new home.
Building a Prosperous Economy
An article about a crackdown of China’s Bitmain mining facility from Wired Magazine prompted Whinstone, Inc. team to come to Rockdale, Texas. It is the operator of the biggest cryptocurrency miner in North America and was previously acquired by Riot Blockchain. Whinstone’s installation in Rockdale took only 183 days, according to its chief executive officer Chad Harris. They began their project in January 2020 and finished it in June of that year. They already have three buildings and 300 megawatt substations, and plan to add 400 megawatts to their business with four new structures.
The success of Whinstone’s Rockdale facility was attributed to the deregulated power grid and wind abundance of Texas. However, Milam County, a small city here with almost 6,000 populations, is said to have contributed the most. Whinstone has a workforce of 120 employees, all lured by the company’s benefits and incentives. Harris proudly shared that all his employees are entitled to paid healthcare and 401k benefits. They are given training in Texas’ Temple College for certifications on construction, human resources, and more. Harris and his team struggled with little funds at the start of their venture. But with any other stories of success, with courage and determination, they succeeded in putting up the largest crypto mining operation in North America.
Milam County Judge Steve Young said the enterprise had become a vital part of Rockdale and Milam County. Texas has seen noticeable improvements in some communities’ economy due to the influx of cryptocurrency mining facilities. The state provides programs necessary for economic growth, but the added boost from bitcoin makes all the difference.
Aside from Whinstone, Argo Blockchain has also started putting up a renewable-energy centered mining facility in Dickens County, Texas. Argo sees this as an opportunity to assist Texas in developing prospects that will contribute to a stronger economy while also supporting the use of renewable energy sources. Argo Blockchain CEO Peter Wall has committed to making Dickens County a leader in reimagining energy for a greener, cleaner, and renewable future. The Dickens county facility will be completed in the first half of 2022.
Core Scientific, a Bitcoin mining operations firm based in Austin, Texas, has joined the ranks of Whinstone and Argo by announcing that it is going to purchase Blockcap, a BTC mining startup based in Austin. Aside from the shared sentiments with the first two companies, Darin Feinstein, co-founder of Core Scientific lauded Texas Governor Abbot in welcoming blockchain industry in its “world class business friendly environment.” Crypto-friendly leaders like Governor Abbot, he said, are important considering bitcoin mining business requires a serious amount of capital. Businesses like this, according to Harris, necessitate good decisions when it comes to finding business partners and long-term success.
Renewable Energy as an Alternative Source
Mining is the process of creating new coins and keeping track of all existing digital token transactions.
Miners use either a GPU (graphics processing unit) or an application-specific integrated circuit (ASIC) in this process. It also necessitates a tremendous amount of power, making Texas an ideal location for it.
Many crypto enterprises have recently viewed the migration as a chance to embrace renewable energy after realizing that mining in the long run is too resource-intensive and unsustainable. North American Bitcoin mining company Bitfarms uses 99% clean energy to power 1.5% of the Bitcoin network. Crypto derivatives trading platform BitMEX have also opted to go carbon neutral, while Marathon Digital Holdings, a United States-based Bitcoin mining firm aims to achieve 70% neutrality soon.
Emerging Challenges for Miners
Despite the fact that Texas is an ideal site for bitcoin mining, challenges will inevitably arise, particularly as the world grapples with the COVID-19 pandemic. Businesses are currently experiencing commodity shortages due to the difficulties in obtaining transformers, wires, and other parts, which might take months to obtain. The shortfall is driven by the coronavirus epidemic, which has disrupted industrial and supply chain operations. Products on pre-engineered buildings are coming in 32 weeks instead of 14 weeks, while big transformers in substations take 64 weeks to arrive.
Beijing’s crackdown on bitcoin mining is rooted in fears of financial risks, while some see it coming from environmental concerns considering the amount of energy mining requires. While this brought a lot of challenges for Bitcoin companies, they are slowly starting to find solace in Texas. This could also be an excellent time to fully embrace the move to renewable energy as the state’s most significant influence in Bitcoin, not to mention a huge opportunity for Texas to grow its economy.
