SBI Holdings, GMO Internet set to mine Bitcoin at 300MW facility in Texas

SBI Holdings and internet service provider GMO Internet are set to start mining bitcoin at a facility in Rockdale, Texas – a popular location for industry firms including Bitmain. 

The two companies agreed to conduct their operation at the 100-acre mining farm set up by Northern Bitcoin AG subsidiary Whinstone, sources told Bloomberg in a new report. 

Northern Bitcoin AG, a Germany-based bitcoin mining company, revealed in Nov. 2019 that the Rockdale facility will initially see more than 300 megawatts in power capability, with the intention to reach one gigawatt by the end of 2020. 

Back in the 1950s, Rockdale was dubbed “the town where it rains money” by The Saturday Evening Post for its lignite coal reserve and significant aluminum production. In recent years, however, the aluminum industry has been in decline and one of the town’s biggest smelting plants, Alcoa, closed down in 2008.

Yet Rockdale’s abundant coal supply and notable growth in wind energy have made it an attractive spot for Bitcoin miners seeking cheap electricity, according to Mike McGlone, senior commodity strategist at Bloomberg Intelligence.

In summer 2018, Bitmain took over the 33,000-acre property formerly owned by Alcoa and started the process of turning it into a mining farm, promising between 400 to 600 jobs. The 50-megawatt farm, branded by Bitmain as the “the world’s largest for bitcoin mining,” was launched in Oct. 2019. According to a new press release, 15,000 miners have been installed in the facility since then.

SBI and GMO’s new initiative builds on the local momentum. While Bitmain’s farm extends over a much larger parcel of land, the expected capacity of Northern Bitcoin AG’s farm could far exceed that of Bitmain’s, according to Bloomberg.

The two farms are not the only mining-related initiatives in the U.S. state. The Digital Currency Group (DCG)-backed investment fund, Layer1, secured $50 million in Oct. 2019 to build mining chips and run its own electricity substations in Texas.

Research shows that currently approximately 70% of crypto mining operations are located in China due to the country’s low electricity prices and miners’ close proximity to Chinese equipment producers like Bitmain and Creative Canaan. But the newfound interest in Rockdale could potentially turn the town into a new powerhouse for the industry, boosting mining businesses in the U.S. more broadly.