According to the Texas Standard, Rockdale, a town in central Texas, is looking to Bitcoin mining to ease an economic slump caused by the closure of the coal-fired power plant and adjacent mine earlier this year.
Bitmain Technologies, one of the largest China-based Bitcoin mining manufacturers, is opening up mining operations at a former aluminum smelter in Rockdale. The Bitcoin mining operation will be located next to Dallas-based Luminant’s Sandow power plant, which has been out of operation since January 2018.
It is estimated that the Bitmain mining operation will create between 300 and 500 jobs—more than enough to replace the 325 jobs lost at the Luminant Sandow power plant.
“The new Bitcoin mining facility is going to be opening at the former Alcoa Aluminium smelter, and that’s next door to the coal plant that just closed,” said Jeff Mosier, an energy and environment reporter for Dallas Morning News. “So now that that’s gone, they have a big industrial facility with lots of electricity infrastructure [capable of] Bitcoin mining, which is essentially a huge server farm.”
Since Bitcoin mining takes a lot of processing power which requires a sheer amount of electricity, it makes sense for large companies and communities to work on it together and mine at scale.
While it remains unclear when and how the facility will launch, Dallas News found on Indeed.com that the Chinese manufacturing giant is looking for a project manager at Rockdale and Wenatchee, Wash.
The Rockdale mining operation would be Bitmain Technology’s second operation from a previous aluminum plant.
Cryptocurrency Mining Profits are Down
Unfortunately, as Bitcoin’s price falls, so does the incentive to mine the token. While Rockdale’s cryptocurrency mining operation does have the potential to help Rockdale’s economy, the profitability of the venture is highly dependent on the value of Bitcoin.
In December 2017, Bitcoin reached its all-time of high of almost $20,000. Bitcoin is currently worth $8,213 as of July 26, 2018. Although Bitcoin has fallen over 60 percent of its all-time value, Bitcoin appears to be breaking out of a strong bearish trend that persisted for several months. In June 2018, Bitcoin dipped to just under $6,000. It has since bounced back strong in the last few weeks.
According to Tom Lee, the managing partner at Fundsrat Global Advisors, “the trajectory of the Bitcoin narrative has inflected. We see inflows of fiat into crypto which supports higher prices.” While Bitcoin’s price is still considerably lower than it once was, Lee’s comments highlight a potential bullish market to come. Not only is a bullish market great for traders and investors, it’s also great for cryptocurrency mining operations.
Clem Chambers, a contributor on Forbes, however, mentioned that because the Bitcoin market is highly volatile, if the market falls, there’s a high chance that the operation may not even be profitable. Earnings from Bitcoin mining operations are not only influenced by people’s perception of Bitcoin but also having the right equipment and hardware to continue the operation. In Rockdale’s case, however, equipment will not be so much of a concern considering Bitmain Technologies is the largest manufacturer for Bitcoin mining machines.