January 13, 2022
Deep in the heart of Texas, on a 100-acre site in Rockdale, 30,000 machines grind away at all hours of the day and night… mining for bitcoin.
The computers are calculating the answers to equations on the blockchain – with the promise of 6.35 bitcoins (what a “block” pays these days) for solving sophisticated mathematical problems.
This company running these machines, Riot Blockchain, is one of the many massive crypto operations managed in the U.S… with that number growing exponentially.
You see, in the spring of 2021, China’s Communist Party outlawed bitcoin mining and also said that crypto cannot be used as tender.
And since then, China’s bitcoin problem has become America’s opportunity.
Within months of China sending crypto companies packing, the U.S. began welcoming more and more mining companies.
America is now positioned to become the dominant force in bitcoin mining… And these mining facilities are worth paying attention to – both as an investor and as a nation.
The Emerging Crypto-Mining Industry
I sat down with Riot Blockchain CEO Jason Les on my American Consequences podcast last week, and he described his journey to mining…
Jason was trained as a computer scientist at University of California, Irvine, but pivoted to becoming a world-class professional poker player.
Soon after, his fascination with bitcoin (which he’d first developed on the poker circuit) brought him yet another job transition – he left poker behind to devote his career to the study and advancement of bitcoin. After joining the board at Riot, Jason then became the company’s CEO.
The algorithms for mining, Jason told me, are performed at lightning speeds. A lot of infrastructure is needed to support all that computer activity. He detailed some of the fascinating aspects of the emerging crypto-mining industry.
At Riot’s facility in Texas, multiple power and electrical components support thousands of mining computers. Some of these machines are on racks getting cooled by air, while others are submerged in a specialized electric fluid to help keep them cool. Meanwhile, 200 highly trained employees are on site, making sure the machines stay cool and perform to their capacity.
Riot is just getting started… Its Whinstone, Texas, facility is about to expand to approximately half a million square feet. That’s quite a mine. And many more are on the way…
Bringing Mining Home
Kentucky, New York, and Georgia have all recently become home to massive crypto-mining operations just in the last year. Kentucky has accrued 18.7% of the collective computer power for mining (or “hash rate”), just behind New York’s 19.9%. Georgia ranks third at 17.3%, and Texas, home to Riot’s Whinstone mine, comes in at fourth place with 14%.
And the investment in these often-underutilized communities and economies is becoming significant.
Take Riot, for example, which has spent “hundreds of millions of dollars” on its facility and is in the process of still expanding.
Meanwhile, over the summer, another company – Blockware Solutions – raised $25 million to purchase thousands of Bitcoin mining “rigs” (or computers) for its new mining operation in Paducah, Kentucky.
As we increasingly progress toward Web 3.0 and welcome a more 3D, virtual-reality-style Internet world… the ability to store value in cryptos like bitcoin will become increasingly necessary.
Now if you’re at all like me… as an American, I prefer the idea of getting my oil from Texas rather than the Middle East for national security reasons. (It’s good to be energy independent, right?)
Following that logic, wouldn’t you also prefer your bitcoin be mined in Texas rather than Eastern Europe?
By encouraging more American mining companies to set up shop here in the U.S., employing American high-tech workers, and keeping us (literally) close to the future of money… it will be a win for the bitcoin industry, a win for U.S. jobs and workers, and a win for U.S. security.
Renewables Powering Bitcoin Mines
Granted, some U.S. lawmakers have expressed fear that bitcoin represents a national security threat. But Jason argues that the U.S. is better off supporting rather than shunning the industry.
While it’s not the role of the government to get involved in the bitcoin industry, I do think it should be the role of the government to support the proliferation of the bitcoin industry and bitcoin mining within its borders, because this is the future…
This is the future of money, and it is good for a nation to be as closely tied to that as possible.
Meanwhile, some lawmakers are also concerned about the energy consumed in mining bitcoin… and it takes a lot of energy.
But Jason argues that areas producing energy from renewable sources have lots of power that is otherwise going unused…
The wind will blow a lot at night, the sun shines all day, water flows 24/7. But that doesn’t always mean there are buyers of that energy. So a lot of that energy gets wasted… Your listeners might be surprised to know about one third of all energy produced globally is wasted. It is unused… It’s lost in transmission.
In fact, the Energy Information Administration reports that more than 60% of the primary energy used to create electricity is wasted by the time the electricity arrives at the customer’s meter, lost in the generation process.
So according to that logic, bitcoin mining actually helps support the fledgling green-energy industry.
In fact, bitcoin mining uses more renewable energy than any other major industry, with roughly 50% of bitcoin mining being globally powered entirely by renewables.
Cryptos are just getting started in the U.S. And the potential for this industry is extraordinary. But it’s critical we continue to provide a hospitable environment here at home to encourage the industry to want to be here long term.
Regardless of its valuation today, last week, or next week… without a doubt, blockchains and mining will be part of the future.
And I’m excited to see the promise of that future being executed, incubated, and encouraged here in the United States of America.
Editor’s Note: Stansberry Research’s crypto expert Eric Wade is warning about an alarming new trend that’s creating thousands of new millionaires while at the same time potentially hurting many others… He details it in this must-see video about “America’s Great Wealth Shift.”
We’re rapidly moving from a paper-based analog world to a digital society. This transition from the industrial age to the computer age is inevitable… and the coronavirus has accelerated everything.
As an investor, you don’t want to be left behind. Click here to see Eric’s limited-time offer – invaluable financial research for less than $50.