Bitcoin miners opened a mine at a former aluminum smelter in the small Texas town of Rockdale. Thanks to this, they have cheap electricity.
Bitmain and Riot Blockchain in one place
Both Bitdeer, the mining company that emerged from the Chinese giant Bitmain, and Riot Blockchain, one of the leading publicly traded bitcoin mining companies in the United States, run data centers at a former aluminum plant in the Texas city of Rockdale.
The city's aluminum smelter was previously the largest in the world until the company that ran it, Alcoa, began shutting down in 2008.
A small rural town
Despite being made up of a tiny rural town with only 5,600 inhabitants, Rockdale has features that are conducive to the development of a cryptocurrency mine - cryptocurrency-friendly politicians, large land areas with derelict industrial infrastructure, and low energy prices electricity.
Rockdale Mayor John King describes the relationship between the local network operator, the Texas Electrical Reliability Council (ERCOT), and the BTC miners as "mutually beneficial." He stressed that miners regularly use electricity that would otherwise be wasted, and that they could also cease operations immediately if energy was needed elsewhere.
- Miners are required to buy a certain amount of energy and what they do is sell it at market [value] and make a profit. They have a contract for two or three cents ... and they can sell energy for $ 9 a kilowatt hour, he said.
Riot has tripled bitcoin production this year. The company now estimates that the Rockdale facility is digging in excess of 500 BTC per month. At current prices, the coins mined are worth around $ 30 million a month. Riot claims to use as many as 100,000 mining rigs.
Texas authorities want more
Texas lawmakers themselves are pushing for the further expansion of the state-owned bitcoin mining. Senator Ted Cruz says natural gas can be used in the process.
Speaking at the Blockchain Summit in Texas on October 10, Cruz argued that natural gas is currently being fired in West Texas because "there is no transmission equipment to get this natural gas where it could be used in the way it would normally be used."
- Use this power to mine bitcoin - he advises local politicians.
Kazakhstan is a new leader on the BTC mining market
Kazakhstan currently ranks second in the world in terms of the bitcoin mining hash index.
The country expects at least $ 1.5 billion in economic revenues from cryptocurrency mining over 5 years.
A report by the Data Center Industry & Blockchain Association of Kazakhstan (NABDC) estimates that cryptocurrency mining could bring the country $ 1.5 billion in revenue over the next five years. Currently, corporate mining of digital currencies generates approximately 98 billion tenge ($ 230 million) annually in the country. Alan Dordzhiev, president of NABDC, made the following statement quoted by the local news site kapital.kz:
"The figure of 98 billion tenge is only an economic effect of companies that are officially involved in mining. If we take into account" gray "miners, this number can safely be multiplied by 2."
When writing about "gray miners", he refers to people who run their own cryptocurrency mining operations.
Regulations, responses ..
The association also called for greater regulation of the mining market to combat illegal mining, which is to prevent a possible shortage of electricity in the country. According to Dorżyyev's estimates, gray economy miners consume about 500 MW of electricity in the country. Earlier this month, the Department of Energy of Kazakhstan proposed a draft regulation to impose limits on the amount of electricity consumed by the cryptocurrency mining industry.
According to data from the University of Cambridge, Kazakhstan has already contributed to the generation of 18.10% of the global bitcoin network hash (BTC). So it is the second country in the world in this respect. Especially now, that is after China has started attacking companies that are engaged in mining activities. This places Kazakhstan just behind the 35.40% share of the USA and above 11.23% for Russia. Based on GlobalPetrolPrices data, the average cost of commercial electricity in Kazakhstan is $ 0.054 per kWh, well below the global average of $ 0.124 per kWh - possible due to the country's huge fossil fuel reserves.