Bitdeer – a firm spun off from Chinese bitcoin mining giant Bitmain – is four-tenths of a mile down the road from Riot Blockchain, one of the biggest publicly traded mining companies in America.
Located an hour northeast of Austin, Rockdale looks like classic rural America.
The Electric Reliability Council of Texas, or ERCOT, is the non-profit organization that operates Texas’ grid.
Because miners at scale compete in a low-margin industry where energy is their main variable cost, they have reason to migrate to the world’s cheapest sources of power.
Rockdale was once home to the largest aluminum plant in the world, run by Alcoa.
In addition, miners can be flexible in the face of fluctuating power supplies and prices.
Not only do miners make use of power otherwise going to waste, they also function as “interruptible load,” meaning they are able to turn off all of their machines with a few seconds’ notice when the grid is in a pinch and needs the extra power.
“There were lots of things that went wrong,” Sen.
Cruz, whose views on bitcoin and the mining industry more widely, have proven prescient, recently weighed in on the topic at the Texas Blockchain Summit in Austin.
Exiled miners have since begun to seek refuge in places like the United States, which recently became the top mining destination on the planet.
At the main entrance to Bitdeer’s Rockdale mine is a small tin shed accented with light blue trim, staffed by a smiling, upbeat guard.
But the company is still fairly closed off.
Unlike Riot’s Whinstone mine, built in what was once thickly wooded forest, Bitdeer took over the closed Alcoa smelter, which was conveniently still hooked up to major electrical lines.
Not much else is known about the specifics of how Bitdeer’s bitcoin mining operation works.
When Whinstone first broke ground in Rockdale in January of 2020, many saw it as the David to Bitdeer’s Goliath.
“They were like, ‘You need this amount for a deposit,’ and we were like, ‘Absolutely, no problem.’ They said, ‘You need a Moody’s graded guarantor,’ and I’m like, ‘Absolutely, no problem,'” described Harris.
“I always joke that when a million dollars lands in a company’s account, there is no way accounting is sending it back.
Every last stick of pipe you could get your hands on,” Harris recounted.
2020 when bitcoin was $4,100, they turned on the mine when it was at $6,100, and Harris remembers thinking that if bitcoin could just hit $8,000 a coin, they wouldn’t go bankrupt.
“We brought them over, gave them the pictures, told them what machine to buy, told them how to do it.
In order to mint these new tokens, a global pool of miners compete against each other to see who can unlock a batch of new bitcoin first.
Harris estimates that at its current capacity, it’s producing more than 500 bitcoin per month, which at today’s prices, is about $30.7 million, or $368 million a year.
Riot acquired the Whinstone mine earlier this year for $80 million, and it is now billed as the biggest in North America.
To put that in context, Gibson says that downtown Dallas uses just 200 megawatts.
“Transformers you can get in about 12 weeks if you were hot to try and had cash, but you’ve still got to get the power off of the lines,” said King.
When rigs are mining, they run a computer program which crunches millions of math equations.
The heated fluid is subsequently pumped and circulated to help with dissipating the heat, at which point the cooled fluid is then pumped back in.
He has 37 five-terabyte hard drives plugged in all around his house, and he uses those machines to mine for chia, an eco-friendly cryptocurrency.
The China-based company said it would invest $500 million to build a massive mining facility at the decommissioned Alcoa power plant in Rockdale in 2018 and create 400 local jobs in the process.
At the same time, Rockdale was in the thick of battling a problem with its water system, where residents complained of smelly red water coming out of their faucets.
But after its crackdown, a mass migration of humans and physical hardware got underway and many began to head to Texas.