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Rockdale, a city of 5600 people, located in Milam County in the state of Texas, has welcomed bitcoin miners into its economic framework, as it seeks to mobilize dormant electricity capacity left behind by the aluminum industry.
With the United States leading the bitcoin mining industry with the highest global hashrate, the state of Texas continues to make a strong case for being the most thriving hub within the continental U.S. The city of Rockdale is located an hour northeast of Austin, and houses two mining giants within a mile of each other, on property owned by Alcoa, an aluminum company. Riot Blockchain owns Whinstone U.S., which prior to the acquisition, was the largest bitcoin mining company in North America. Bitdeer, a spin-off of Chinese company Bitmain, is the other heavy-hitter. Other Chinese miners have inquired of Mayor King whether they may set up mining businesses in Rockdale, after Chinese miners began migrating east following the decisive ban on cryptocurrency imposed by the Chinese state. In keeping with the Chinese state’s operational opacity, Bitdeer remains mum regarding the details of mining operations, despite its relatively unguarded premises.
Economic benefits are shared
There are economic incentives for Rockdale to accommodate bitcoin miners. Rockdale’s economic development director, James Gibson, has said that the town has 160 acres available for mining operations. The economic interaction that mining companies have with Rockdale is attractive to both the companies and the city.
There was an imbalance between power generation and power distribution before miners arrived. When Alcoa, the largest aluminum plant in the world, began shutting down its operations in Rockdale in 2008, slowly but surely electricity capacity in its rural location started to outstrip demand. Due to the fiscal infeasibility of building transmission networks to transport this electricity to populous regions, the electricity previously used by Alcoa remained unused. The mining companies now use this electricity, and since mining companies can switch off their operations without significant impact on their profitability, they are in a better position when electricity demand increases than the aluminum smelters. There are financial incentives for switching off. Miners can also buy power and then sell it back to the grid at a profit.
Officials buying into crypto
Senator Ted Cruz sees bitcoin miners’ ability to switch off during times of elevated demand as a huge bonus. He sees bitcoin mining, rather than being a consumer of energy, as being helpful in strengthening the energy infrastructure of the state.
Mayor King holds a master’s degree in electrical engineering and has shown an affinity for dipping his toes into a small-scale mining operation. He mines an eco-friendly Chinese coin called chia at his home, having set up 37 five-terabyte hard drives all around his house, citing a need to understand crypto, due to the economic benefit Rockdale may be able to reap from mining activity.
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