The rapid ascent of the mining industry in the U.S. was largely fueled by maturing capital markets. American operators were able to expand rapidly once they had secured capital through multiple sources, leveraging their track records of profitability and existing capital as collateral. While a global pandemic shut down a large part of the economy, stimulus payments to the mining industry proved beneficial. And as it turns out, China isn't the only country cracking down on bitcoin mining.
Fort Worth is a leader in bitcoin mining
The Texas
Blockchain Council is looking to attract new businesses to the Fort Worth area
by promoting bitcoin mining. Bitcoin mining is a form of digital currency that
requires sophisticated hardware to verify transactions and add them to a public
ledger known as the blockchain. The first person or computer to solve the
problem is rewarded with newly minted bitcoins. Fort Worth is positioned to be
a leader in this growing industry, and if the bitcoin mining operation is
successful, it may attract other tech companies and startups to the city.
While the
city is initially met with skepticism, the decision has since proved to be an
attractive option. Fort Worth may be ahead of the curve when it comes to
emerging technologies, and its example could inspire other cities to take a
similar step. Bitcoin mining could also provide an economic boost to the local
economy, and other cities could follow suit. This innovative approach may help
the city to attract more bitcoin merchants.
Energy Funders' mining operations are off-grid
Investors in
the Bitcoin Discovery Fund can own shares in an off-grid bitcoin mine. Each
month, the mining operations will distribute proceeds to investors. The
cryptocurrency's popularity is on the rise, and Energy Funders offers the first
Bitcoin investment opportunity. Its investors are rewarded with monthly
dividends. Unlike a mutual fund, Energy Funders' mining operations are off-grid
and operate off-grid. This reduces risk and enables investors to make better
decisions about their investments.
For investors
looking for a good mix of returns, oil and gas are attractive. They can be a
hedge against inflation. But oil and gas production and operations are
expensive and complex. Bitcoin mining is not a sure bet. In addition, investors
may have to wait three to five years before seeing any returns. In contrast,
traditional investments allow investors to sell their shares on the same day,
making them ideal for short-term trading.
Sangha Systems' mining operation repurposes an old steel
mill in Illinois
An Illinois-based
cryptocurrency mining company plans to build a 2-5 MW behind-the-meter solar
array in a former steel mill to power its operation. The developers have signed
a letter of intent with utility company AEP OnSite Partners to use
blockchain-controlled solar panels to collect and store energy from the sun.
The project will allow the company to better track the amount of energy it
generates and the grid it uses. Once complete, the company plans to expand the
mining operation and hopes to switch the entire industry over to renewable
energy.
Although
Sangha's project was inspired by Elon Musk's 'Twitter' campaign, there have
been hurdles in bringing crypto-mining to a small town like Chicago. One of
these challenges is the lack of infrastructure. The company repurposed an old
steel mill in Illinois and built a mining facility on about a third of its
land. The company currently generates enough electricity to power about 5,000
homes every day.
China's crackdown on bitcoin mining
While
China's crackdown on bitcoin mining is a major setback for the Chinese
currency, it has opened up huge opportunities for miners outside the country.
Previously, China generated half of the world's bitcoin production, but the
crackdown has helped global miners compete with Chinese miners and lower the
cost of producing bitcoin. Bitcoin mining companies including Hello Pal,
Marathon Digital Holdings, Inc., and Riot Blockchain, Inc., have benefited
greatly from the crackdown.
During the
UNGA this year, China pledged to become carbon neutral by 2020 and to limit its
energy consumption growth to 1.9% per year. As bitcoin is a known energy
guzzler, it's no surprise that the government in Inner Mongolia has published a
proposal to curtail energy consumption, which includes shutting down cryptocurrency
mining farms and projects. However, despite these proposals, Bitcoin mining is
not likely to stop in China anytime soon.
Cost of bitcoin mining
While
electricity prices vary by state, a study conducted by Global Energy Institute
showed that California and Connecticut had the highest electricity costs for
Bitcoin mining. However, other states, such as Washington and Idaho, had much
lower costs. One teenager earned over $100k from a $1,000 investment in
Bitcoin. The cost of electricity isn't everything. Electricity rates are only a
small part of the total cost of bitcoin mining. But it is important to consider
other factors as well, such as labor costs.
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