The decision is part of the city’s larger goal to position itself as a place that welcomes technology and innovation, Mayor Mattie Parker said in an interview ahead of the vote. The three machines, donated by the Texas Blockchain Council, will run 24/7 for the next six months, according to a city press release.
Cryptocurrencies like bitcoin operate on what’s called a “proof of work model,” in which computers race to solve a complex math problem with the goal of earning cryptocurrency as a reward. It’s the computer equivalent of taking a pickaxe to solid rock in hope of finding gold.
This process takes a lot of electricity as banks of machines are often needed to generate enough computing power. However, the city is limiting its power use by only operating the three donated machines.
The city estimated the electrical usage of each machine should be roughly the same as a vacuum cleaner, about 1,400 watts an hour. The city said additional electricity needed to power the mining servers will be offset by revenues generated from mining bitcoin.
The point of the pilot, though, is not to make money, Parker said. “It’s really just for us to dip our toe in the water and see how this works for us,” she said. Parker emphasized the importance of positioning Fort Worth as a place welcoming to technology and innovation.
She pointed to major investments by venture capital firms into technology companies in 2021. “This is where the future is, and because cryptocurrency gets lumped into that innovation conversation, we want Fort Worth to get noticed for the right things, and this became part of our story,” Parker said.
Fort Worth is smart to at least experiment with mining bitcoin, said Michael Sherrod, the William M. Dickey entrepreneur in residence at TCU’s Neeley school. Bitcoin is here to stay, and having its total supply limited at 21 million makes it a hedge against inflation, Sherrod said.
Sherrod said cryptocurrencies like bitcoin that have their total supply limited can protect cities like Fort Worth in the event of runaway inflation. “It’s a good experiment to see how this can be used, especially in case of some kind of major economic disruption,” he said. Critics, though, have pointed to the massive amounts of energy needed to power bitcoin mining machines to argue they’re bad for the environment and local utilities.
They point to examples like Upstate New York, where increased energy demand from cryptocurrency mining companies drove up the overall cost of electricity. That won’t happen in North Texas, said Lee Bratcher, president of the industry trade group the Texas Blockchain Council. The free market system in Texas will encourage electricity generators to meet the demand, Bratcher said.
He pointed to cheap wind and solar energy in West Texas, which could easily be scaled to meet any extra energy needs. Brachter also noted a lot of bitcoin mining machines are, “flexible load,” meaning they only operate when the electricity is cheapest.
That could lower the cost of electricity by creating more consistent demand for power instead of the system where demand peaks during certain times of day, he said.
According to star-telegram.com. Source of photo: internet