Rockdale, a rural Texan town with nearly 5,600 people, is home to the two biggest Bitcoin mining companies — Bitdeer and Riot Blockchain.
These archrivals are not only competing for cheap electricity and market share, but they’re also neighbors on a property once occupied by Alcoa, an aluminum maker.
Bitdeer, a creation of the Chinese bitcoin mining giant Bitmain, is about 2,000 feet away from Riot Blockchain — one of the biggest Bitcoin mining firms in the US.
Riot Blockchain is transparent in how they conduct business. They even allow the media to peek into their business operations daily. Bitdeer is different. They keep company operations a guarded secret and aren’t so keen on hosting visitors.
Why the tiny town of Rockdale?
Rockdale is a bitcoin miner’s heaven, and for a good number of reasons. The tiny Texan town boasts largely abandoned infrastructure ideal for repurposing, crypto-friendly politicians, vast acres of land, and the ability to connect into Texas’ power grid.
Large-scale miners need cheap electricity to mine crypto. Rockdale offers dirt-cheap power rates, thanks to high competition among power providers in Texas.
The Electric Reliability Council of Texas (ERCOT) is an NGO operating a deregulated Texas power grid, which gives customers the power to choose between providers. This high competition among providers means lower power rates for bitcoin miners.
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John King, Rockdale Mayor, says ERCOT and crypto miners’ have a mutually beneficial relationship, emphasizing that the power these miners consume would be otherwise wasted. Then again, if the power is required elsewhere, miners are ready to leave.
King also added that cryptocurrency miners often buy a certain amount of power, then sell it back into the market and profit from the sale. “They have a contract of two cents or three cents…and they can sell it for $9 a kilowatt-hour”.
Within a year, Riot Blockchain tripled its Bitcoin production. The crypto mining company currently holds over $190 million crypto coins.
According to Riot’s estimation, the company is producing over 500 bitcoin tokens every month from its Rockdale facility. Using the current bitcoin rates, that translates to about $30 million crypto-tokens every month. Riot Blockchain website hosts 100K mining rigs.
Texas Senator, Ted Cruz, says crypto-mining helps greatly in capturing natural gas that the state currently flares.
Speaking at a blockchain summit, Cruz urges miners to keep using the state’s power to mine crypto, adding that the “instant you’re doing it you’re helping the environment because rather than flaring the natural gas you’re putting it to productive use”.
