It looks like the small town of Rockdale in Texas is all set to become the epicenter of the next crypto hub. From discussions with the Chamber of Commerce to transporting mining equipment from China, the rural West Texan community is attracting miners escaping China.
A New Crypto Hub Rising In The Lonestar State
The crackdown on Bitcoin mining in China has sent many Chinese miners scurrying across the globe in search of greener pastures to continue their operations. While many are considering the neighboring country of Kazakhstan, a significant percentage of the fleeing miners have turned to the US, especially Texas. With significantly lower energy prices, the state seems ideal for energy-intensive Bitcoin mining operations. Additionally, the state’s deregulated power grid allows consumers to choose between providers.
The miners could also take on the role of virtual power plants by securing long-term purchase agreements upfront, with the flexibility of selling some of that power back to the grid during high-demand periods.
Jason Les, CEO of Riot Blockchain and the owner and operator of the largest bitcoin mining and hosting facility in North America, commented,
“It's kind of an economic calculation for miners. They see, ‘oh wow, the price of energy is going up,’ so not only does it not make sense for me to mine bitcoin anymore, but it actually makes sense for me to take the power that I own and sell that back to the grid.”
No Dearth Of Support
Large-scale mining crypto companies are already putting their money into making Texas the next hub of crypto mining. Shenzhen-based BIT Mining has already invested $26 million in a 57-megawatt data center in Texas, while Beijing-based Bitmain plans to expand its Rockdale facility capacity by 20,000 additional servers.
Even policymakers are adopting a supportive stance towards the state’s crypto initiatives. Earlier this year, Texas Governor Greg Abbott pass a law to establish a master plan to expand the state’s crypto industry. He also tweeted his support for the digital asset, saying,
“Blockchain is a booming industry that Texas needs to be involved in.”
Are We Looking At Another Blackout In Texas?
Concerns about the state’s electricity capacity are valid, considering the major power outages this winter. According to Josh Rhodes, a research associate at the University of Texas at Austin Energy Institute, the state’s infrastructure can support demand through 2035. However, miners will need to remain flexible with their operations, including shutting shop during heavy demand months. Also, the miners’ mindset to opt for other renewable energy sources like wind power (which accounts for 20% of the state’s energy) could counter the concerns of carbon emissions challenging Bitcoin mining.
Back in Rockdale, Mayor John King said the city is struggling to keep up with demand. However, for a small rural American town that built its meager fortune on the dwindling aluminum industry, China’s Bitcoin miners might come as a blessing.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.