Cryptocurrency miners are spurring economic growth in Texas’ rural counties as tax incentives drive the industry toward the state’s sprawling countryside.
Crypto mining is the process by which networks of specialized computers generate new Bitcoin along with verifying and securing new transactions on the blockchain, according to an article by Coinbase. A blockchain is a type of virtual ledger that documents cryptocurrency transactions.
“It’s a virtuous circle,” stated Coinbase, a digital currency platform for buying, selling, transferring, and storing cryptocurrency. “The miners maintain and secure the blockchain, the blockchain awards the coins, and the coins provide an incentive for the miners to maintain the blockchain.”
“Following the 2021 crypto crackdown in China, many crypto miners came to Texas,” said Alexander Hernández Romanowski, a crypto research analyst at Tribal Credit and a crypto scholar at Rice University’s Baker Institute.
Instead of choosing urban areas with larger workforces and better infrastructure, crypto miners are doing the opposite and picking rural areas for their business needs, according to Lee Bratcher, president of the Texas Blockchain Council.
Earlier this year, Argo Blockchain relocated its crypto mining and technology business to a 125,000-square-foot Helios facility in Dickens County, about 4.5 hours southeast of Dallas. Since opening the facility in May, Argo has added roughly $17 million to the local tax base, according to Dickens County Judge Kevin Brendle.
Jacob Rodriguez was a West Texas cotton farmer before getting hired as a cryptocurrency miner at Argo Blockchain. Rodriguez works on the “dunk team” at the Helios facility, where computers are submerged in an efficiency-improving liquid to reduce heat and noise.
Since starting his job at Argo, Rodriguez claims he is better off emotionally and financially.
“I have more money and more time with my family,” Rodriguez said.
Texas political leaders have been promoting the state as a destination for companies producing bitcoin and other digital currencies, touting the state’s reputation for low taxes and cheap power.
U.S. Senator Ted Cruz was recently recognized with the first “Digital Future Award” in September for his embrace of the cryptocurrency frontier, as previously reported by The Dallas Express.
Another crypto mining company that has made the Lone Star State its home is Riot Blockchain, which relocated to Milam County, roughly 60 miles northeast of Austin, after the county offered the company a 45% discount on local taxes for 10 years. Since then, Riot has added hundreds of new jobs and millions of dollars to the local tax base, according to County Judge Steve Young.
Crypto supports have frequently touted Texas as an ideal destination for the industry, but concerns have been raised about whether the state’s power grid can handle the significant energy use required for the mining process.
In February of 2021, Texas was struck by a historic winter storm that crippled the state’s energy grid and left hundreds dead and millions without power. Since then, the Electric Reliability Council of Texas (ERCOT) and the state’s power transmission companies have refused to allow any large power user to connect to the grid unless there is enough power supply.
The number of crypto companies that have requested permission to connect to the state’s power grid would use nearly as much electricity as the city of Houston, according to ERCOT.