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Digital currency "mining" industry enters the central United States
[2021/8/27]
China Daily, August 27. According to the British "The Economist" report, the central region of the United States, with its low electricity prices and green power advantages, is vying to introduce cryptocurrency mining companies to revitalize the local economy.

In a 320-acre mining facility in Dickens County, Texas, United States, hundreds of machines with more powerful performance than ordinary computers will soon be installed, running day and night, processing a series of complex algorithms. If the processing is successful, you will get newly minted bitcoins in return. Each bitcoin is currently worth about 44,000 U.S. dollars.

All these machines need space and a lot of electricity.

                          

When the Canadian cryptocurrency mining company Argo Blockchain first proposed to Dickens County Governor Kevin Brendle (Kevin Brendle) the idea of ​​building a Bitcoin mining farm in the area, the latter accepted it. Dickens County has a population of 2,300 people, "mostly improved pastures and grasslands," Brundle said.

"This is an open pasture, where cattle are raised, and there are also some farms." He said, "We don't have much economic development."

Mining can stimulate economic development, create employment opportunities, and improve the source of tax revenue in the county. In return, mining will enjoy the cheapest electricity in the entire game.

In order to be profitable, mining cryptocurrency requires a lot of cheap energy. It is precisely because of China's cheap electricity that China was once the center of Bitcoin mining, and more than half of the world's mining was in China. . However, in the early summer of this year, China developed a self-sponsored, more controllable digital currency, and local governments began to shut down Bitcoin mining farms. Since then, the Bitcoin hash rate (the processing power used to produce Bitcoin) in China has dropped by half.

                            

Since then, cryptocurrency miners have begun to find new places for cheap electricity around the world, and many people have targeted Texas.

The power grid in Texas is relatively loosely regulated, and users can choose between different power suppliers, and the suppliers are driven by this to compete to offer low prices. Jason Les, CEO of Riot Blockchain, a US cryptocurrency mining company, said that mines can sign long-term contracts with power suppliers to purchase large amounts of electricity at a fixed price over a period of several years.

Riot Blockchain recently acquired Whinstone US, the largest U.S. Bitcoin mining facility in Rockdale, Texas, for $80 million. Whinstone stated that its facility can produce 500 bitcoins per month-a total value of $22 million based on the current value of bitcoins.

When the demand for electricity rises, especially in the summer, Texas power companies will actually pay mining facilities to reduce their energy use.

"If you are a miner with a long-term power purchase agreement, then you will have electricity at a fixed price...In any case, you have to commit to purchasing energy for many years," Rice said.

"As a Bitcoin miner, you have electricity at the core. You can work like a virtual power plant. You buy electricity at a fixed lower price and then resell it to the grid."

In recent months, the leaders of Texas have been publicly expressing their support for the entry of cryptocurrency mining into the state.

In June, Texas Governor Greg Abbott signed a bill to incorporate cryptocurrency into commercial law, which will facilitate cryptocurrency companies to enter and operate in the state more conveniently. In the same month, Abbott stated on Twitter that ¡°Texas will become the leader in cryptocurrency!¡± Earlier, Texas grocery chain H-E-B announced that it would place cryptocurrency self-service terminals in some stores.

Another reason that makes Texas attractive to mining companies is that 20% of the state's energy comes from wind power, which makes mining in Texas more environmentally friendly than China, because China has about two-thirds of electricity. From coal. Tesla CEO Elon Musk previously suspended Tesla¡¯s Bitcoin transactions on the grounds that ¡°Bitcoin mining and transactions have led to a rapid increase in the use of fossil fuels, especially coal, which is the most emitting of all fuels. Poor". Musk said that once about half of the energy used by mining companies comes from clean energy, Tesla will resume bitcoin transactions.

                            

Although states such as Kentucky and Louisiana also have cheap electricity, and politicians in states such as Wyoming (recently vigorously promoting cryptocurrency companies to become limited liability companies) are also friendly to cryptocurrency, Texas seems to be the only one. A state that can meet the above two conditions.

"We can see that the combination of good political will and the local power market has prompted people to start building mines in Texas," said Josh Goodbody, chief operating officer of digital asset management company Qredo. , "More and more people regard Texas as a good environment for setting up a cryptocurrency business."

In addition to the Argo and Whinstone mines, Chinese mining company BIT Mining also invested US$25 million in the construction of a new mine in Texas.

However, the influx of a large number of cryptocurrency companies is not without risks. China's Bitmai said in 2018 that it will invest US$500 million to build a super mine in Rockdale to create jobs for local communities. After a coal-fired power plant was shut down in 2008, this community experienced a lot of unemployment. However, in the fall of the same year, the price of Bitcoin fell below $3,000, and Bitmai withdrew from the project.

Blundell of Dickens County said he is cautiously optimistic. He hopes that the cryptocurrency mining business can boost the economy of his county and provide some residents with stable jobs. However, he emphasized that long-term sustainability is important.

"We are now seeing a lot of people rushing in and seeing a lot of people full of interest. We understand why they are interested. However, we just don't know what the future of Bitcoin mining is," Brundle said. "How long can this industry last, how long can it last, I think this is the biggest worry now."


(This article is from Bitpush.News)
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