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Why bitcoin entrepreneurs are flocking to rural Texas – The Guardian

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Mining cryptocurrency requires lots of cheap energy and many miners have settled on Texas as their destination
Last modified on Tue 17 Aug 2021 05.02 EDT
In the middle of rural Texas, a cryptocurrency mine is currently under construction.
Hundreds of machines more powerful than the average computer will soon be housed in this 320-acre mining facility in Dickens county, where they will work day and night to solve a complex series of algorithms. If successful, the reward will be newly minted bitcoin, currently worth about $44,000 each.

All the machines need to thrive are spaces to sit and electricity – lots of it.
Kevin Brendle, Dickens county’s top elected official, embraced the idea of the mine when Argo Blockchain, a Canadian cryptocurrency mining company, first approached him with the idea of building a facility in the area. Dickens county, population 2,300, “is mostly improved pasture and grassland”, Brendle said.
“It’s wide-open range land, it’s cattle country with a little farming,” he said. “We don’t have a lot of economic development.”
A mine could help stimulate the economy, creating jobs and improving the county’s tax base. And in return, the mine will be powered by some of the cheapest electricity in the world.
To be profitable, mining cryptocurrency requires lots of cheap energy. China was once the main hub for mining, with over half of the world’s mining taking place in the country, precisely because its electricity is cheap. But earlier this summer, local governments in China began to shut down bitcoin mines as the country works to develop its own, better-controlled digital currency. The bitcoin hashrate – the processing power used to produce bitcoin – halved after the crackdown.
Miners have since been scouring the globe for places where electricity is cheap, and many have settled on Texas as their destination.
Texas’s power grid is deregulated, which means customers can choose between different power providers and providers are thus incentivized to provide low rates.
Mining facilities can set up long-term contracts with power providers that allows them to purchase electricity at a fixed price for many years, says Jason Les, CEO of Riot Blockchain, a US-based cryptocurrency mining company.
Riot Blockchain recently acquired Whinstone US, the largest bitcoin mining facility in the US based in Rockdale, Texas, for $80m. Whinstone says its facility can produce 500 bitcoin per month – worth a total of $22m at bitcoin’s current value.
When demand for electricity goes up, particularly in the summer months, Texas power companies will actually pay mining facilities to lower their energy usage.
“If you were a miner that has a long-term power purchase agreement, then you own power at a fixed price … you’re committing to buying energy for years no matter what,” Les said.
“As a bitcoin miner, you essentially own that power, and that allows you to work like a virtual power plant. You can take the power that you agreed to buy at a fixed lower price, and then you can sell that back to the grid.”
In recent months, Texas leaders have been vocal about their support of cryptocurrency mining coming to their state.
In June, Governor Greg Abbott signed into law a bill that puts cryptocurrency under commercial law, making it easier for cryptocurrency businesses to operate in the state. In the same month, Abbott, tweeted: “Texas will be the cryptocurrency leader!” after the Texas grocery chain H-E-B announced that it will be putting cryptocurrency kiosks in some of its stores.
Also making the state attractive to miners is that 20% of its energy comes from wind power, making mining in Texas a much greener alternative than mining in China, where about two-thirds of electricity comes from coal. Tesla’s CEO, Elon Musk, halted his company’s acceptance of bitcoin transactions, citing the “rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”. Musk said that Tesla will resume accepting bitcoin once there’s confirmation that about half of the energy used by miners will be from clean energy.
While states like Kentucky and Louisiana also have cheap power, and others like Wyoming – which recently made it easier for cryptocurrency businesses to become LLCs – have politicians that are cryptocurrency-friendly, Texas is the only state that seems to offer miners the best of both worlds.
“We’ve seen a good combination of political will with the reality of the electricity market there that have led people to start building in Texas,” said Josh Goodbody, chief operating office of Qredo, a digital asset management company. “Increasingly, people are looking at Texas as a friendly place to build crypto businesses.”
Along with the Argo and Whinstone facilities, BIT Mining, a Chinese mining company, has invested $25m to build a mine in Texas.
An influx of interest from cryptocurrency businesses does not come without risk, though. Bitmain, a China-based company, said in 2018 that it would invest $500m to build a huge mining facility in Rockdale, bringing jobs to a community that has seen huge job losses after a coal plant closure in 2008. But after the price of bitcoin dropped to just over $3,000 in the fall, the company pulled out of the project.
Brendle, of Dickens, said that his optimism is cautious. He has hope that cryptocurrency mining will be able to bolster his county’s economy and give stable jobs to some of his residents, but he notes that long-term sustainability is important.
“We see movement now, we see a lot of interest. We understand why that interest is there. But we just don’t know what the future of bitcoin mining is,” Brendle said. “I think that’s the biggest concern right now is how long, how well the industry will sustain itself.”

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The 10 Fastest-Growing Cryptocurrency Ecosystems In 2021 – Forbes

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As the cryptocurrency industry grows more fragmented, new data shows which platforms software developers are flocking to.
Two years ago, bitcoin dominated the cryptocurrency market, gobbling up 70% of its market value. But as crypto has ballooned to exceed $2 trillion in assets, the industry has fragmented. Today, bitcoin’s share sits below 40%, and new crypto networks are popping up every day. One way to sift through the clutter and see where the industry is going is to follow the software developers who build and maintain crypto networks. 
“Developers tend to be pretty rational. If there’s something they can play with that has real utility, developers have this ability to go find that thing,” says Avichal Garg, a managing partner at crypto-focused venture firm Electric Capital. He views the number of developers who are working on a crypto network “as a leading indicator of where value will be created and accrue over the next 10 years.” 
Garg co-authored a report with Electric Capital partner Maria Shen that reveals which cryptocurrency platforms attracted the most developers in 2021. They used data from GitHub, the go-to online repository where developers store their code, to estimate how many engineers work on each platform. Their data underestimates the total number of developers, since it doesn’t capture code that’s written privately or the many engineers that work at companies like Coinbase. 
Their research says 18,000 active developers (including both full and part time contributors) are working on cryptocurrency platforms, up from roughly 10,000 a year ago. Garg sees that surge as a validation of the industry’s growth and longevity. Kinjal Shah, an investor at Blockchain Capital, agrees: “When people are voting with their feet and their time, it’s a strong signal that there is something they’re building for the long term,” she says. 
Electric Capital’s research analyzed nearly 500,000 sets of code and 160 million code updates. It compared December 2020 to December 2021 to calculate growth. For the list below, it counted a developer as full time if he or she made at least 10 software updates in a month. 
 
The fastest-growing platforms are all competitors to Ethereum, the second-largest crypto network launched in 2015 that has 1,300 full time developers creating applications on it. Ethereum acts as a decentralized computer that applications can be built on, and it’s maintained by more than 5,000 “nodes” or computers that help validate transactions. One downside of being so widely distributed is that Ethereum can only process about 15 transactions a second (the Nasdaq stock market averages about 20,000 transactions per second), and a single transaction fee can sometimes exceed $100.
All of these fast-growing crypto networks take different approaches than Ethereum to decentralization and “consensus,” the algorithmic process of validating a transaction. They settle transactions faster and have lower fees, and most aren’t as widely decentralized as Ethereum. 
Korea-based Terra was founded by entrepreneur Do Kwon, 30, and launched four years ago. Its UST “stable coin”—a cryptocurrency pegged to the value of a U.S. dollar–has grown quickly to reach a market value of $10 billion, putting it in the top five stable coins in the world, according to crypto data site Messari. San Francisco-based Solana surprised many crypto insiders over the past year as it attracted hundreds of developers and vocal support from crypto billionaire Sam Bankman-Fried. A variety of applications built on Solana, ranging from crypto trading exchanges and lending products to music apps, have become very popular. Solana’s SOL token went from $1.85 in January 2021 to $170 by the end of the year, hitting a market value of $53 billion. 
Near, a protocol founded in the Bay Area in 2017, was launched by Alexander Skidanov and Illia Polosukhin, two engineers who worked previously on the highly regarded MemSQL distributed database system and Google’s TensorFlow machine learning platform. Both Solana and Near were built in Rust, a popular programming language that’s more widely used than Solidity, which Ethereum is based on. Solana and Near have also been aggressive about offering grants to software developers if they agree to build applications on their respective systems. Near announced an $800 million grant program in October, and former Circle CMO Marieke Flament became the Near Foundation’s CEO this year. 
One platform that lost a significant number of developers was EOS, which dropped from about 125 total active developers (including full and part time) in December 2020 to 80 a year later. In 2018, EOS famously ran a $4 billion “initial coin offering” fundraise and was later fined $24 million by the SEC for running an unregistered security offering. The company didn’t admit or deny wrongdoing.  
In addition to the fastest-growing networks, Electric Capital’s research shows which have the largest number of total developers. Ethereum has long retained the top spot, and about one in every four new crypto developers who entered the industry over the last year chose to build on Ethereum. 
 

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Crypto scams are the top threat to investors 'by far,' say securities regulators – CNBC

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Crypto scams are the top threat to investors ‘by far,’ say securities regulators  CNBC
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World's Top Bitcoin Mining-Rig Maker Halts Sales as Clients Flee – Bloomberg

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Bitcoin mining machines operate at a mining facility by Bitmain Technologies Ltd. in Inner Mongolia, China.

Bitmain Technologies Ltd. has suspended sales of machines for spot delivery globally, aiming to prop up local prices after crypto miners fleeing Beijing’s crackdown dumped used mining rigs on the market.
The world’s biggest maker of Bitcoin machines told the local mining community Wednesday it has stopped selling new equipment after prices for top-tier rigs plunged by about 75% since April. By postponing sales, it could help miners exiting the industry get better prices for their machines. Bitmain could also benefit if the reduced supply buoys prices over the longer term for new machines.

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