Cryptocurrency miners are lining up to get to Texas, and rural counties are welcoming them

Jacob Rodriguez was driving a John Deere tractor in a cotton field in west Texas when he received a call that would change his life.

“I was pulling a 59-foot seeder … and at the same time I was on the phone with my interview,” Rodriguez, 29, told The Texas Tribune.

On the other end of the phone earlier this year were representatives from a new company coming to Dickens County, a community of about 2,000 people an hour east of Lubbock.

The video above is ABC13’s 24/7 live stream.

In March, Rodriguez had given up growing cotton — something he called “just another job” — and began training to work at a cryptocurrency mine.

The county had exactly what London-based Argo Blockchain was looking for: lots of open land and easy access to affordable energy, thanks to a large wind farm built there more than a decade ago.

SEE ALSO: Mann pleads guilty to operating an unlicensed cryptocurrency business in Houston in 2016

Texas political leaders have promoted the state as a target for companies that produce bitcoin and other digital currencies, touting the state’s reputation for low taxes and cheap electricity. Around 30 have come in the past decade, and dozens more have expressed interest in moving to Texas.

But instead of moving to the state’s major urban areas — which have the extensive infrastructure and large workforce that attracts most relocating companies — cryptocurrency companies have largely done the opposite and settled in rural areas, according to Texas President Lee Bratcher Blockchain Council. a group promoting crypto growth and innovation.

Crypto companies have been welcomed by many small towns hungry for economic recovery. Argo Blockchain opened its 125,000-square-foot Helios facility in Dickens County in May, hiring a few dozen locals, including Rodriguez. It also increased the local tax base by $17 million, according to District Judge Kevin Brendle. The county’s estimated total property tax value is $283 million, he said.

Argo Blockchain employees unload computers used to mine Bitcoin at the Helios facility.

Trace Thomas for The Texas Tribune

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A worker prepares mining hardware for installation in pods.

Trace Thomas for The Texas Tribune

This economic stimulus has enabled Dickens County to reduce the county’s property taxes by about 1.5%, provide small pay increases to county employees, and purchase new equipment for the sheriff’s office and road and bridge improvements.

“The end result is improved community service,” Brendle said. “We will be able to serve them better and we will be able to be competitive on our wages.”

In Milam County, northeast of Austin, a major Riot Blockchain-owned crypto facility that opened in 2020 has created hundreds of new jobs and millions of dollars in local tax bases, according to District Judge Steve Young. He said the increase in taxes has enabled the county government to pay for basic services like road improvements. When the crypto company needed to hire contractors for various projects, it hired locally, he added.

Crypto mining uses powerful computers to produce digital currencies called tokens, which can be used to make online purchases like traditional money. The crypto transactions are run through computers rather than a centralized entity like a bank, with the aim of giving people the opportunity to gain wealth outside of the traditional financial system.

RELATED: Galveston ISD workers out of work after cryptocurrency mining machines found near schools

Computers use a lot of electricity. According to the Texas power grid operator, the Electric Reliability Council of Texas, the numerous crypto companies applying for permission to connect to the electricity grid would consume almost as much electricity as the city of Houston.

That has raised questions about whether the state’s power grid — which collapsed infamously in February 2021 during a violent winter storm, sending millions of Texans into darkness for days and killing hundreds — can handle that extra demand. However, energy experts said ERCOT and the state’s power transmission companies would not allow any major electricity consumer to connect to the grid unless there was adequate electricity supply.

Like some other industries, crypto companies can shut down operations when high demand strains the grid. This summer, when the grid operator urged Texans to conserve electricity due to strained grid conditions, Bratcher said crypto businesses were quickly shutting down.

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The McAdoo wind farm powers the Argo Blockchain cryptocurrency facility.

Trace Thomas for The Texas Tribune

Navigating rural Texas

Cryptocurrency is still a relatively new industry – Bitcoin, the first and most well-known digital currency launched in 2009 – and has seen dramatic rises and falls this year, while virtual currencies seemed to explode in popularity among both professional and retail investors .

Bitcoin price has plunged more than 50% in the first half of this year from its November 2021 peak, and the fall continues. Big companies like Coinbase, a major cryptocurrency exchange, have lost value and companies have lost billions. The decline in cryptocurrencies is part of a broader economic downturn spurred by inflation, rising interest rates, and economic disruption from Russia’s war in Ukraine.

Meanwhile, a Chinese government decision last year to ban cryptocurrency production had ramifications as far away as Texas.

“After the 2021 crackdown on crypto in China, a lot of crypto miners came to Texas,” said Alexander Hernández Romanowski, crypto research analyst at Tribal.credit and crypto scientist at Rice University’s Baker Institute.

The new crypto ventures have met resistance in some communities. A grassroots group in Navarro County, northeast of Waco, has brought together some citizens to protest a Bitcoin facility proposed by Riot Blockchain, claiming it would cause pollution by consuming large amounts of electricity.

However, according to energy analysts, there has not been widespread, organized opposition to cryptocurrency operations in Texas to date.

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“I don’t know of anyone who’s actually taking action or investigating,” said Virginia Palacios, executive director of Commission Shift, an organization that seeks to hold the state’s oil and gas regulator to account.

Many rural counties are offering tax breaks to crypto companies to lure them into their communities. Milam County, which lost its largest employer — an Alcoa aluminum plant that employed nearly 1,000 people in its heyday and closed in 2008 — offered Riot Blockchain a 45% local tax rebate for 10 years, said Young, the district judge.

“Companies generally won’t come into your county unless you’re willing to give them a tax break,” Young said.

Crypto companies are still adding millions of dollars to the local tax base, Young said, and in Milam County, Riot Blockchain also helped rebuild the local animal shelter and installed new lights at local athletic fields.

On the other side of the state, Brendle said Argo Blockchain has committed to renovating the county’s public swimming pool, which closed more than a decade ago.

Brendle and Young both said local residents weren’t opposed to the new ventures but had many questions about the cryptocurrency and whether outsiders were flocking to their rural counties.

“When they first came here, people had no idea what it was — neither did I,” Young said. “Over time, the county as a whole has started to understand what is going on and clearly recognizes the fact that they are out there to create jobs, improve county services, hire mostly local contractors and spend a ton of money here. It is a great benefit for the county.”

A new workforce

In Dickens County, Argo Blockchain has hired more than half of its approximately 50 community employees. The rest of the workers are bussed in from Lubbock every day, said Argo Blockchain CEO Peter Wall.

They are full-time employees such as site managers, security guards, and technicians who repair, install, and monitor the computers.

Rodriguez said he was part of the “dunk team” at the Helios facility. Rodriguez and his collaborators immerse the computers in a liquid that improves their efficiency, keeps them cool, and reduces the machines’ noise.

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Lane Kingsbery is the data center manager at Argo Blockchain’s Helios facility.

Trace Thomas for The Texas Tribune

“It sounds counterintuitive,” said Lane Kingsbery, data center manager for the Helios facility. “But it’s a great tool that actually extends their lifespan and improves efficiency.”

Some communities with new crypto mining facilities have complained about the constant noise.

But in Dickens County, Rodriguez said most people appreciate what Argo Blockchain’s Helios facility has brought to the community. And for him, life has improved dramatically.

“I’m doing better emotionally and financially,” said Rodriguez, who is married with four children. “I have more money and more time with my family.”

Kate Harris, who worked as a freelance audio engineer in Dickens County, decided to apply for a position at the crypto facility after seeing an announcement in the local paper that Argo Blockchain was coming to town. Harris, who is 42 and has a son, said her family needed a reliable and stable source of income and she thought this could be it.

After she applied and landed a job as a technician, Harris said she was promoted twice. She said she earns better than freelance and now has health benefits.

“Our team wasn’t really hired because they’re crypto experts,” Harris said. “We were all hired because of our attitudes and our work ethic. We have diverse employees and we are better at it.”

“We’ll find out over time,” Harris added. “It’s kind of scary for some people. It’s super exciting for me.”

Disclosure: Rice University, Rice University Baker Institute for Public Policy, and the Texas Blockchain Council have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization funded in part by donations from members, foundations, and corporate sponsors. Financial backers play no part in the Tribune’s journalism. A complete list can be found here.

The Texas Tribune is a nonprofit, nonpartisan media organization that educates and collaborates with Texans on public policy, politics, government and statewide issues.

https://abc13.com/texas-cryptocurrency-miners-bitcoin-mining-rural-counties-host-crypto-companies-environmental-impacts/12291355/ Cryptocurrency miners are lining up to get to Texas, and rural counties are welcoming them

Russell Falcon

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