Although the bitcoin craze has died down some since it rose to monumental values in 2017, there is still a booming industry in the cryptocurrency. For those who don’t know about the digital coinage, it and the blockchain technology it utilizes was not too long ago touted as the next big thing.
Although intriguing and vastly practical for protecting user data, cybersecurity, and a wide range of manufacturing models, it has yet to reach a high level of utility for individuals. But wide scale adoption of novel ideas take time, after all.
Currently, one bitcoin is worth about $8,200 USD. That could change quickly because of the volatility of money. But to acquire bitcoins-more realistically, to acquire fractions of a bitcoin-means you have to “mine” them. As Jason Evangelho of Forbes states, mining for cryptocurrencies (like Bitcoin) means that you are using extremely powerful computers to solve math encryption problems that do two things:
- Miners verify a particular public record transaction by solving a difficult math problem (of sorts), which keeps the transaction anonymous through encryption.
- This “solved” math problem closes a “block”, which you can think of a node on a chain of other solved blocks- all of which are decentralized and unlikely to be hacked.
But what does all of this have to do with Texas? To put it simply, mining for bitcoins requires a lot of computer power to close off blocks, which in turn means a lot of electricity is needed to power the mining of even just a fraction of a bitcoin. But because Texas has some of the cheapest electricity available, a lot of entrepreneurs are flocking to Texas to develop a Bitcoin empire of sorts.
Layer1 and Bitmain
The entrepreneur and billionaire Peter Thiel is investing 200 million in a Bitcoin venture from Layer1, which will be located. West Texas. Giving credit where credit is due when considering electrical usage, the entire project will aim to harness all-renewable energy to generate electricity and power necessary for the cooling of the ultra-powerful mining computers.
Another company, Bitmain, is posed to take over Rockdale, Texas as well. The Chinese cryptocurrency hardware manufacturer will produce what they’re calling the largest bitcoin mining facility ever.
But despite these installments, there’s definitely a bright point to the excessive electricity consumption that large bitcoin mining installations will pose. After all, projects like Layer1 and Bitmain could be a solution to natural gas flaring.
“Flaring”, or burning off of excess gas, is what producers do when there is a surplus. This practice is obviously not good for the environment and bitcoin miners can use the surplus natural gas that would already go to waste and power their powerful computers.
But bitcoin is not exactly a viable strategy for everyone. Just ask the inhabitants of Rockdale, Texas, who all had high hopes for new jobs to be created when Bitmain arrived, only to be disappointed when only about 30 would become available.
Regardless, things are shaping up to be interesting in Texas as the bitcoin mining industry continues to expand.