Fort Worth, Texas, is now the first municipal government in the United States to mine bitcoin – and in an almost poetic devotion to the initiative, Mayor Mattie Parker oversaw the construction of a small mining farm at the Hall of city.
Three Bitmain Antminer S9 mining rigs will operate 24 hours a day, seven days a week in the temperature-controlled Information Technology wing of Fort Worth City Hall. The city says miners will be hosted on a private network to minimize security risks.
Bitcoin operates on a proof-of-work mining model, which means miners around the world use powerful computers to simultaneously mint new bitcoins and validate transactions. The process requires professional-grade equipment, some technical know-how, and lots of electricity. That’s why the Fort Worth pilot project is starting small, according to the mayor.
Each of the three machines in the program will consume the same amount of energy as a household vacuum cleaner, according to city estimates. Although the mayor does not expect the three miners to be major moneymakers, the the cost of electricity needed for the program should be offset by the value of bitcoin mined.
Beyond adding bitcoin to the city’s balance sheet, Parker — who took office last year and is the city’s first-ever millennial mayor — thinks leaning into bitcoin will go a long way in putting Fort Worth on the map.
“For Fort Worth, a lot of people don’t know who we are,” Parker told CNBC.
“We want to change that conversation, and we believe technological innovation, including cryptocurrency, is the way we’re going to do that.”
Rebranding Fort Worth
Building a three-rig mine, even in a crypto-friendly jurisdiction like Texas, requires cutting out red tape.
“It’s something new for any city,” Parker said. “There are a lot of politics here that we had to jump through hoops to figure out.”
To make it happen, the city teamed up with a few key partners, including the Texas Blockchain Council, which donated the three mining rigs (each worth around $600 each), and Luxor Technologies, a mining pool, which allows a single miner to combine their hashing power with thousands of other miners around the world to increase their chances of earning bitcoin.
Parker, who has been in the role for nearly a year, got the idea to get into bitcoin after talking to a few friends in the venture capital world, who told him that 80% of venture capital is basically devoted to technology and that cryptocurrency is at the center of it right now.
“We’re the fastest growing city in the country. There’s so much excitement around North Texas and Fort Worth in particular. To really sustain that energy, we have to push ourselves differently, and we think that cryptocurrency is a huge part of our future economy,” Parker said.
After six months, Fort Worth will reevaluate and decide whether to invest real money in building a mine.
Bitcoin mine inside Fort Worth City Hall
Alex Brammer, Luxor’s vice president of business development, said Fort Worth’s move will bolster bitcoin’s legitimacy as a strategic asset.
“Mayor Parker is leading by example and effectively de-risking bitcoin mining and bitcoin cash strategies for all other mayors across the country, and I wouldn’t be surprised to see more announcements like this in the future,” Brammer said.
Brammer also raised the possibility that governments could use bitcoin mining to help stabilize power grids in the transition to clean energy.
“In the future, it is likely that bitcoin mining will sit alongside utility-scale battery storage to provide grid-hardening services that prevent outages and other grid disruptions caused by the addition of generation. wind and intermittent solar. In this context, it would make sense for cities to start funding and building large-scale mining infrastructure themselves.”
Texas Blockchain Council President Lee Bratcher, who works with bitcoin miners across the state, is also optimistic about the outlook for Fort Worth.
“Fort Worth has the geographic proximity to miners and favorable urban leadership that makes it a favorite to be the bitcoin mining capital of Texas and therefore of the United States,” Bratcher said.
For now, the project isn’t really about making a profit, or helping fix Texas’ wayward power grid. Instead, it’s about being a frontrunner and normalizing the idea of a municipal government mining bitcoin and putting the world’s largest cryptocurrency on its balance sheet.
“It’s out of the box for any government, isn’t it? Usually things move at a snail’s pace. And in Fort Worth, we want to do things differently and weave our way into the room” , said the mayor.