Rockdale: Work starts on ‘world’s largest Bitcoin mining facility’

Published: Nov. 1, 2019 at 4:01 PM CDT
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Work is underway on the first phase of a 100-acre cryptocurrency data mining facility that Metairie, La.-based Whinstone US, Inc., is building in Rockdale, the Rockdale Municipal District confirmed Friday.

A formal groundbreaking is scheduled next Thursday.

“Building the world’s largest Bitcoin mining facility in Texas is a big step for our fast-growing company and a great success for the blockchain industry in the United States,” said Whinstone US chief operating officer and co-founder Lyle Theriot.

“The conditions are excellent, and our customers’ demand is overwhelming. We see our new facility as a game-changer in the industry and are excited to expand on US soil.”

The 5-year-old company runs similar facilities in the Netherlands, Sweden and Louisiana.

Bitcoin mining, in simple terms, involves processing transactions using special software in the Bitcoin digital currency system that result in the addition of a “block” to a digital ledger of past transactions called a blockchain, a sort of value-exchange protocol, which is decentralized and used across so many computers that records can’t be altered.

Solving a single block is worth 12.5 bitcoins and on Friday the value of one bitcoin was about $9,200.

Mining bitcoins takes a lot of computing power and requires a lot of electricity, however.

One analysis found that in the U.S., the cost of mining a single bitcoin, which varies from state to state, runs from more than $3,000 to $6,000 across the country.

The first phase of the Milam County project consists of 180,000-square-feet of computers powered by 300 megawatts that are scheduled to be ready in the first quarter of next year.

A full gigawatt of computing power is expected by the end of 2020.

Two publicly traded companies that will use what officials called a significant share of the computing capacity to perform Bitcoin mining at the center are among the initial customers.

The company has signed a long-term lease agreement with Alcoa for the site and expects to make an initial investment of $100 million in construction and property improvements and another $50 million in furniture, fixtures and equipment.

“The 200 new jobs, in addition to an estimated 51 spin-off jobs, are significant for the district,” Rockdale MDD President Dr. John Weed III said.

The data center will offset the hit the county took in October 2017 when Luminant announced in October 2017 that it planned to close the two-unit Sandow Power Plant in Milam County and the Three Oaks Mine in Bastrop County, which supported the Milam County plant, which affected a total of about 450 employees.

Rockdale weathered a similar blow in 2008 when Alcoa announced it was curtailing smelter operations and laying off more than 1,500 workers.’

The company isn’t the first to express interest in the area.

Bitmain Technologies, Ltd., announced in August 2018 that it planned to build a $500 million data center that would create 400 new jobs.

Then in January, the company announced it was temporarily suspending operations amid changes at its headquarters.

On Oct. 21, however, the company announced that it has launched work on its 50-megawatt data mining facility in Rockdale, which could be expanded to a capacity of more than 300-megawatts.