Good things happen to those who wait. And in case of crypto, three months is sometimes enough.
That’s the time between a Wired article that railed against the inevitable fool’s errand of working with Bitmain… and the launch of Bitmain’s Texas 50 MW mining farm in Rockdale, Texas, a location that the Chinese company considers strategic.
The mining farm is built on a 33,000 acre site formerly owned by Alcoa, and it began as a 25 MW project in 2018. Due to the sheer size of the former smelting plant, the mining farm can be expanded for a capacity of 300 MW, which would most likely make it the world’s largest single installation.
The plant will be operated by DMG Blockchain Solutions, a Canadian company that is also involved in mining.
The project has received approval by the Rockdale Municipal Development District, a special economic committee formed after the failure of Alcoa’s plant in 2008. The Rockdale government will provide local suppliers to support the construction of the data center, while Bitmain has pledged to begin working with the local school district to provide education and training on blockchain technology and other technology subjects.
This is not the first major mining investment in Texas. As previously reported by Fortune, Layer1 has received a $50M investment by Peter Thiel and others to build a wind-powered mining farm in the state. The company plans to perform a vertical integration, producing both mining chips and its own electric energy.
And while the road hasn’t been smooth, investments in the mining sector are slowly but surely coming in Texas, much to the chagrin of some mainstream technology journalists.
“The Hard-Luck Texas Town That Bet On Bitcoin – And Lost”
In July this year, Wired published a lengthy piece recounting the tragic fate of the town of Rockdale, Texas.
Complete with heart-rending photo-journalism – farmers gazing at cornfields, sad development officers gazing into the middle-distance, vacant storefronts – the Wired piece was the embodiment of the anti-crypto bias normalized by Gizmodo, Engadget, and other tech blogs.
As a typical industrial town built around a single massive enterprise, the closing of the Alcoa plant hit the town’s economy hard. The town’s bid to host an Amazon warehouse was rejected, and its leadership had to settle on the next big offerer: Bitmain.
The plans saw light in the first half of 2018, when few prophesized the magnitude of crypto winter. Fast forward to the end of 2018, and the mining plant was operational, albeit at very limited capacity and with a skeleton crew.
But Bitcoin had plunged to $3,000 in the meantime, and Bitmain had to scrap its IPO plans due to precipitating revenue, halting further expansion for the moment.
Unfortunately, that’s where the Wired story seems to end, with a struggling Bitmain offering a plan for a limited launch in early 2019.
And yet, three months after publication it’s somehow launched at double initial capacity.
Taking some of the bias out
While the article notes that cryptocurrency mining is a “very low labor-to-capital ratio” enterprise, it fails to take into account the realities of today’s world.
Mining farms are essentially specialized data centers, which don’t see nearly the same backlash for offering too few jobs or consuming too much energy. A Google data center of similar size to the Rockdale farm employs 150 people, which is far lower than the initial 500 people envisioned by Bitmain.
Traditional projects also require years of construction time, and that’s without considering potential delays. A solar power plant in Canada, like the one mentioned in the article, will require at least two years to get built.
The article almost betrays its entire narrative in a single passage, stating that “[town] folks don’t seem bitter about the experience.”
It turns out there’s a very clear reason for that: and anti-crypto bias thankfully cannot change the facts on the ground.