Two Bitcoin mining behemoths are competing for cheap electricity in a small Texas town.
Bitdeer, a mining firm spun out of Chinese giant Bitmain, and Riot Blockchain, one of the leading publicly traded Bitcoin mining firms in the United States, both run data centers in Rockdale, Texas, at a former aluminum smelting facility.
The town’s aluminum smelting plant was previously the world’s largest, until the company that ran it, Alcoa, decided to close it down in 2008. According to Lee Bratcher, president of the Texas Blockchain Council, the facility’s energy capacity was squandered from the time Alcoa left until the miners arrived.
Despite being a small rural town of only 5,600 people, Rockdale offers all of the advantages sought after by industrial-scale miners, including crypto-friendly politicians, large plots of land with abandoned industrial infrastructure ripe for repurposing, and dirt-cheap electricity prices due to Texas’ deregulated market.
Rockdale Mayor John King describes the mutually beneficial relationship between the local grid operator, the Electric Reliability Council of Texas (ERCOT), and miners. He emphasized that miners regularly consume electricity power that would otherwise be wasted, and that they can also immediately shut down operations if power is required elsewhere. He continued, saying:
“Miners commit to purchasing a certain amount of power, which they then resell at market [value] and profit from.” They have a contract for two or three cents per kilowatt hour…and they can sell it for $9 per kilowatt hour.”
Riot has more than tripled its Bitcoin production this year, according to ULTCOIN365 on October 7.
The company now estimates that its Rockdale facility produces more than 500 BTC per month. The mined coins are worth $30 million per month at current prices. According to Riot, the site is home to 100,000 mining rigs.
Texan lawmakers are pushing for the state’s embrace of Bitcoin mining to be expanded further, with Senator Ted Cruz describing mining as a way to capture natural gas that the state currently flares.
Cruz claimed that natural gas is currently being flared in West Texas because “there is no transmission equipment to get that natural gas where it could be used the way natural gas would ordinarily be employed.”
“Utilize that computing power to mine Bitcoin.” “Part of the beauty of it is that you’re immediately helping the environment by not flaring the natural gas and instead putting it to productive use,” he added.