In the small town of Rockdale, Texas, a huge windswept construction site alone illustrates the central role Americans intend to play in cryptocurrencies, now that China has decided to desert the sector.
With a capacity of 750 megawatts, the country’s largest bitcoin farm already has more than 100,000 computers in three buildings 350 meters long. In a few months, they will be seven.
China has opened a boulevard in the United States by intensifying its fight against both bitcoin transactions and their mining, their manufacture on these farms thanks to the resolution of complex equations by thousands of computers.
To perform these energy-intensive operations, Texas’s cheap electricity is its trump card in addition to its pro-business environment and skilled workforce, according to Chad Everett Harris, CEO and co-creator of Whinstone, owner of the Rockdale farm.
“All the leaders in this industry want to come to Texas!“, he smiles from one of the temporary barracks of his factory-site, cap screwed on his head.
Originally from New Orleans, he started mining from home in January 2018, with a computer that made him $ 60 a day, and sold his farm for 651 million euros last May to the American company Riot Blockchain. .
As of September 2019, China was still the world’s largest producer of bitcoin, responsible for two-thirds of mining.
But keen to launch its own cryptocurrency, the Chinese government is stepping up its offensive every day against the many players in the sector who had thrived until then on its territory.
Data released by the University of Cambridge on Wednesday showed that bitcoin mining had more than doubled in the United States between May and August, bringing the American share to 35.4% of the activity.
Sam Tabar, chief strategy officer at mining company Bit Digital, which operates in the United States and Canada, says he began his withdrawal from China in 2020 and accelerated it as the crackdown intensified.
You want to be sure that not everything will be stolen by the state
“China’s bitcoin mining ban was an unwitting giveaway to the US“, he explains.”Thanks to their ban, an entire sector has migrated to North America, with advanced know-how and equipment.“.
After their investments were cut short by the authoritarian Chinese regime, many investors saw the United States as an ideal destination, with its democratic political system, independent justice and sacrosanct protection of private property.
“When you are going to invest for the long term in a country and to accumulate wealth there, you want to be sure that not everything will be stolen by the state.“, explains David Yermack, cryptocurrency expert at New York University.
Even if, according to him, the switch to the United States is only temporary because Northern Europe has clean, cheap and abundant energy, in addition to a climate capable of helping to cool down huge computer rooms in operation.
In the meantime, America’s rise in mining has stirred up criticism of its environmental cost. Bitcoin mining consumes as much electricity every year as all of the Philippines, according to the University of Cambridge.
“Texas bitcoin mining uses less than 2% of all energy present“, reassures Chad Everett Harris, who considers that the consumption of his Whinstone plant”helps stabilize the network“.
And to add: “Our energy profile is the same as Ercot“, the Texas electricity distribution network operator, whose energy in 2020 was 23% wind, 11% nuclear and 2% solar, the rest coming from natural gas (46%) and coal (18% ).
Texas’ deregulated market offers great flexibility for businesses, says Viktoriya Zotova, professor of economics at Georgetown University. “In principle, they can decide to buy electricity when it is cheap and not to buy it when it is expensive.“.
Bit Digital has a site in Buffalo, New York. Sam Tabar notes that this city was one of the largest industrial centers in the country, before its jobs left the national territory for China.
“The circle is complete !“, he concludes with irony.