In a small Texas hamlet, two Bitcoin mining behemoths are squabbling over inexpensive power.
Bitdeer, a mining company split off of Chinese behemoth Bitmain, and Riot Blockchain, one of the most well-known publicly-listed Bitcoin mining companies in the United States, are both using data centres in the Texas town of Rockdale.
The town’s aluminium smelting factory was formerly the world’s largest, but it was out of business in 2008 by the corporation that managed it, Alcoa. The facility’s energy capacity was squandered from Alcoa’s departure until the miners set up business, according to Lee Bratcher, president of the Texas Blockchain Council.
Despite being a small rural town with a population of only 5,600 people, Rockdale offers all of the advantages sought by large-scale miners. Crypto-friendly politicians, large plots of land with abandoned industrial infrastructure ripe for repurposing. As well as dirt-cheap electricity thanks to Texas’ deregulated market.
The Electric Reliability Council of Texas (ERCOT) and miners have a mutually beneficial relationship, according to Rockdale Mayor John King. He stressed that miners utilise electricity that would otherwise squandered on a daily basis. And that they can quickly shut down operations if power is essential elsewhere. He elaborated:
“Miners commit to purchasing a set quantity of electricity, which they then resell at the market (value) and profit from”. They have a contract for two or three cents per kilowatt-hour, which they can sell for $9.”
Bitcoin mining is a way to absorb natural gas
Riot has achieved more than threefold of its Bitcoin output this year, according to a study published on Oct. 7.
The company currently believes that its Rockdale plant produces over 500 BTC each month. Minted coins are worth $30 million each month at current pricing. According to Riot, 100,000 mining rigs are located on the site.
Senator Ted Cruz, a Republican from Texas, has described Bitcoin mining as a way to absorb natural gas that the state now burns.
Cruz said that natural gas is now being flared in West Texas because “there is no transmission technology to deliver that natural gas. Where it might be usable the same way as natural gas would typically do.”
“Use that processing power to mine bitcoins”. “Part of the beauty of it is that you’re immediately benefiting the environment. By putting natural gas to productive use rather than flaring it,” he said.