The entire world is experiencing a Bitcoin gold rush. In 2013, the value of the digital currency was less than $10 billion. Now, just a year later, its value reached over $12 billion. That’s amazing growth for a currency that is not backed by gold or government backing, which means that its value is entirely an act of faith in the technology.
Texas is home to a number of Bitcoin mining operations, and the state’s agriculture departments aren’t too concerned. In fact, the Texas Department of Agriculture (TDA) just announced it will provide free mining leases to any company that wants one. The announcement came after a delegation from the bitcoin mining industry visited Texas sites in June to look at the potential, and the state is preparing to add more, according to the TDA.
There are over 22,000 bitcoin miners in the U.S., and more are opening every day. The state of Texas is no exception, as a number of counties have declared themselves friendly to the cryptocurrency industry.. Read more about what does mining crypto mean and let us know what you think.
Texas, the country’s second-largest state and home to southern hospitality, is welcoming a slew of Bitcoin (BTC) miners who have lately come to the area. Following China’s ban on cryptocurrency mining in May, a number of Bitcoin mining firms have moved to Texas to continue business.
This, however, should not be surprising. Due to apparent factors such as its deregulated power system, growing renewable energy, and openly pro-crypto government leaders, Texas may very well be the perfect place for Bitcoin mining. With the recent installation of cryptocurrency kiosks in grocery stores, Texas Governor Greg Abbott recently tweeted his enthusiasm about Texas being the next “crypto leader.”
While all of these factors entice Bitcoin miners to set up business in Texas, rural towns seeking economic development have emerged as a less-publicized aspect that is attracting mining firms to the state.
Counties in Texas are welcoming Bitcoin miners to help improve the economy.
According to Chad Harris, chief executive officer of Whinstone Inc., the operator of North America’s biggest crypto facility, his team moved to Rockdale, Texas to construct Whinstone after reading about China’s Bitmain mining operation’s collapse in 2019:
“We didn’t want to leave Rockdale as soon as we arrived. Whinstone was constructed in 183 days. We began in January 2023 and completed the project in June 2023. We already have three buildings, 300 megawatt substations, and four more buildings that will contribute 400 megawatts.”
While Texas’ abundant wind and deregulated electricity system have aided the company’s growth, Harris also credits Rockdale, a tiny town in Milam County with a population of about 6,000 people, for a large part of Whinstone’s success.
And, although it may not be apparent, Harris revealed that, apart from the cost of electricity in Texas, the state’s workforce has been the most significant advantage for Whinstone. “Whinstone is different from other mining businesses in that we have our own workforce of 120 people with paid healthcare and 401(k) plans.” He said, “We also utilize Texas employee incentives and send our employees to Temple College in Texas for training and certification in areas like as construction and human resources.”
Texas is divided into 254 counties, with populations ranging from over 4 million to little over 100 persons in certain places. While the state of Texas offers a variety of local development initiatives to help local economies, the inflow of cryptocurrency mining firms is having a significant effect.
Judge Steve Young of Milam County, for example, told Cointelegraph that Whinstone has become a vital element of Rockdale and Milam County. “Whinstone has made a concerted effort to be a part of the community by participating in local activities,” he said. Harris and the Whinstone founding team arrived in Milam County with little money, but with bravery and drive, they built the biggest Bitcoin mining business in North America, according to Young.
While Whinstone was one of the first Bitcoin mining operations to do this, others are already following suit. Argo Blockchain has started ground on a highly anticipated renewable energy-focused 200-megawatt bitcoin mining plant in Dickens County, Texas, according to Peter Wall, CEO of Argo Blockchain.
Argo was originally interested in mining cryptocurrency in West Texas because of the abundance of local renewables, which allowed Argo to host renewable production at the site, according to Wall. “Because there is no local load,” Wall said, “we are boosting the economics for local renewable producers and enabling for even more renewable development.”
Equally significant, Wall noted that Dickens County is a “Qualified Opportunity Zone,” which means that the area is in financial hardship. Wall continued, “
“Argo’s Dickens County activities will benefit the local community. We think that by creating employment, we can revitalize the town, and we will continue to look for ways to assist and grow Dickens County while positioning it as a leader in redefining energy for a better, cleaner, sustainable future.”
The establishment of Argo’s mining activities, according to Wall, will be a tremendous development opportunity for both Argo and the Dickens County region. Argo’s facility is scheduled to be finished in the first half of 2023, according to Wall. Argo has started filing for an initial public offering in the United States, in addition to constructing in West Texas.
Core Scientific, a Bitcoin mining operations business based in Austin, Texas, has joined the ranks of Whinstone and Argo by announcing that it is poised to purchase Blockcap, a BTC mining startup based in Austin. Core Scientific is also expected to go public on Nasdaq in the near future.
Darin Feinstein, co-founder of Core Scientific, a blockchain infrastructure firm, told Cointelegraph that the firm was attracted to Texas for a variety of reasons, including the huge quantity of land, renewable energy, and sustainable supplies. Core Scientific’s decision to extend its operations to Texas was influenced by the Texas community.
Texas Governor Rick Perry has established a “world-class business-friendly climate that not only promotes entrepreneurship and technology, but has also been hospitable to the blockchain industry,” according to Feinstein. According to Feinsteint, politicians who are crypto-friendly, such as Governor Abbot, are required to invest money.
This is an essential issue to address given the size of the Bitcoin mining industry. One Bitcoin transaction, according to the Digiconomist’s Bitcoin Energy Consumption Index, takes 1,720 kWh to complete, which is almost 59 days of electricity for the typical U.S. home. “A crypto mining operation needs a lot of money, and you have to make solid business partners and long-term development decisions,” Harris said.
With long-term success in mind, Texas’ electrical grid operator, the Electric Reliability Council of Texas, or ERCOT, has begun paying Whinstone for an agreement to cease purchasing power during times of high energy demand, which usually happens during the state’s scorching summers. According to Harris,
“Historically, in the ERCOT market, we might anticipate to power down between 50 and 72 times between June and September, depending on grid circumstances. Consider a Bitcoin miner to be a virtual power plant; with the press of a button, we can actually supply electricity (by not consuming it) in under 5 seconds. Whereas conventional generating providers may take hours to power up in order to meet increased demand.”
Although Texas is friendly, the mining sector confronts new difficulties.
Despite its friendly climate and apparently plentiful natural resources, big Bitcoin mining firms moving to Texas will undoubtedly encounter new difficulties, which will be exacerbated by the COVID-19 epidemic.
Commodity shortages, according to Harris, are the greatest issue the crypto mining business is presently facing. “Transformers, cables, and other components are very tough to get by right now. We began buying materials 6-8 months ago to expand Whinstone this summer, so we were ahead of the game. Everything was ordered in October of last year.”
Businesses blamed COVID-19 interruptions in production and supply chain operations for commodities shortages and price increases for items like agricultural products and construction materials, according to the Federal Reserve’s quarterly Beige Book poll. “Instead of 14 weeks, pre-engineered construction materials will be delivered in 32 weeks. It takes 64 weeks for large transformers at substations to arrive. “Every business that wants to construct a crypto mining plant today is going to have a delivery material problem,” Harris pointed out.
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Despite this, it’s essential to remember that bitcoin mining remains mainly decentralized. As a result, large Bitcoin mining operations aren’t the only ones that contribute to the hash rate. In reality, the hash rate distribution is progressively favoring tiny, anonymous miners, according to statistics.
Furthermore, the Chinese prohibition on Bitcoin mining has benefitted big mining firms. According to Sam Tabar, chief strategy officer of Bit Digital, a publicly traded miner, China’s Bitcoin mining restriction resulted in an unexpected gift to the US. “Now, along with enormous capital investment, energy innovation, and employment, the center of Bitcoin creation has shifted from China to North America.”
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