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The new Texas gold rush: Bitcoin mining

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With shared experience mining Bitcoin across Europe and North America, Frankfurt-based Northern Bitcoin and Texas-based Whinstone US plan to build a gigawatt Bitcoin mining facility, which will consume enough electricity to power over half a million homes.

This mega-mining plant will join several smaller projects already on the plains of Texas that

collectively may start to challenge China's dominance over the industry by giving the U.S. a larger slice of the action.

In a joint statement announcing the merger, the co-founders of Whinstone US said the deal could “shape the future course of the global mining industry.”

"Building the world’s largest Bitcoin mining facility in Texas is a big step for our fast-growing company and a great success for the blockchain industry in the United States,” said Whinstone US chief operating officer and co-founder Lyle Theriot.

Construction of the plant is set to begin in 2020 when the merger is complete. The initial phase will see the creation of a $150 million data facility occupying 180,000 square feet.

At this stage the facility will have a capacity of more than 300 megawatts, making it the largest Bitcoin mining plant in the world. The final capacity of one gigawatt is expected to be reached in the fourth quarter of 2020. The infrastructure is expected to be made available for other power-hungry applications like video rendering and artificial intelligence.

Why Texas?

The hot humid plains of Texas might seem to be an illogical place to run the power-hungry chips needed to mine bitcoin. These devices are typically put to work in colder regions where they are less likely to overheat.

But, the new mega venture is just one of several bitcoin mining projects choosing to build in this part of Texas outside Rockdale, which in the early fifties was a bustling center of the aluminum smelting industry known as “the town where it rains money.”

Since the massive aluminum smelting firm Alcoa left the area a decade ago, the local economy has fallen into decline. And in 2018 the former site failed to attract interest from Amazon, who turned down a bid to consider the 33,000-plus acre site for its second corporate headquarters.

A year later, an unlikely savior arrived in the form of Beijing-based Bitmain, which was fleeing increasing hostility from the Chinese government and keen to take advantage of the state’s abundant supply of natural gas for powering generators, and derelict aluminum-smelting plants which remain connected to the electricity grid. Though the project faced delays on the back of financial difficulties following the bitcoin downturn, the new headquarters of the bitcoin mining giant was finally finished in October.

Before Northern Bitcoin and Whinstone arrived, this new mining plant looked set to be the world's largest, with plans to increase its power output from an initial level of 25 Megawatts to a maximum of 300, and also breathe life into the stagnant local economy by creating jobs and providing training and educational programs for locals.

500 miles west, another unique bitcoin mining project is being built on dozens of acres of land between the Texas cities of Midland and El Paso. Digital Currency Group (DCG)-backed firm Layer1 announced last month that it had raised $50 million to develop a wind-powered bitcoin mining plant that relies on a proprietary new cooling technology to prevent the chips from overheating in the Texas sun.

Collectively, these mining projects provide more test cases for industrial redevelopment based on bitcoin mining in locations that have neither cool weather nor renewable sources of energy.

And, they also offer an opportunity to wrench back some of the 70 percent of the bitcoin mining market share that is currently claimed by Chinese miners. This could help reduce the centralizing effect of China's dominance by giving Westerners a greater stake.



OhNoCrypto

via https://www.ohnocrypto.com

Kieran Smith, Khareem Sudlow