Bitdeer, a company spun out of Bitmain, and Riot Blockchain, one of the world’s leading Bitcoin mining firms, both operate data centers at a former aluminum smelting plant in Rockdale, Texas.
Alcoa, the company that ran the plant, ceased operations in 2008, ending the town’s glory days as the world’s largest aluminium smelting plant. From Alcoa’s departure until the miners set up shop, the facility’s energy capacity was wasted, said Lee Bratcher, president of the Texas Blockchain Council.
Rockdale is a tiny town of just 5,600 people that has all the advantages miners are looking for – crypto-friendly politicians, vast plots of land with abandoned industrial infrastructure, and low electricity prices thanks to Texas’ deregulated market.
According to Rockdale Mayor John King, ERCOT and miners enjoy a mutually beneficial relationship. It was pointed out that miners regularly consume electricity that would otherwise be wasted, as well as the ability to shut down operations instantly if power was required elsewhere. According to him:
“Miners are committed to buying a certain amount of power and what they do is they sell it back at market [value] and make a profit. They have a contract of two cents or three cents…and they can sell it for $9 a kilowatt hour.”
As reported by Cointelegraph on Oct. 7, Riot has more than tripled its Bitcoin production this year.
The firm now estimates that the facility is producing more than 500 BTC per month from its facility in Rockdale. At current prices, the mined coins equate to $30 million per month. Riot says the site hosts 100,000 mining rigs.
Texan lawmakers are pushing for a further expansion in the state’s Bitcoin mining embrace, with Senator Ted Cruz describing mining as a means to capture natural gas that the state currently flares.
Speaking during the Oct. 10 Texas Blockchain Summit, Cruz argued 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.”
“Use that power to mine Bitcoin. Part of the beauty of that is the instant you’re doing it you’re helping the environment enormously because rather than flaring the natural gas you’re putting it to productive use,” he added.