Fort Worth began cryptocurrency mining over two years ago. What were the results?

On Jul 28, 2024

Fort Worth is becoming a cryptocurrency destination.

An influx of cryptocurrency businesses now call Cowtown home — and Fort Worth is embracing them. Experts and Fort Worth officials attribute that growth to the city’s decision to bring a bitcoin mining operation to City Hall in April 2022.

“For Fort Worth, the municipal bitcoin mining, I think, created this tech-hub energy that the city needs to continue to build on,” said Brandon Chicotsky, an assistant marketing professor at Texas Christian University.

Carlo Capua, the city’s chief of strategy and innovation, said that effort and Texas’ favorable business practices spurred companies to set up shop here.

“Fort Worth is innovative, it’s forward thinking, it’s not afraid to try dynamic things to position itself as a great home for entrepreneurs,” Capua said. “You can talk theoretically sometimes about why your city’s great, and (the program’s success) is a perfect opportunity to give a real specific example of how we are putting our money where our mouth is.”

Tangible effect

Advanced Crypto Services is one of the companies that moved to Fort Worth in the last two years.

Started in the garage of founder and CEO James Scaggs in Frisco, the maintenance and repair bitcoin mining company is a startup/nonprofit member of the Texas Blockchain Council, an organization dedicated to promoting blockchain technology.

Fort Worth’s relationship to the cryptocurrency industry played a factor in Advanced Crypto Services’ move and has been a net positive, Scaggs said. The business gained access to local opportunities, grants and programs.

The company also got closer to clients.

Businesses are moving to Tarrant County to be closer to where the mines are being built, Texas Blockchain Council President Lee Bratcher said.

“Just like Fort Worth was the nearest city to the oil field — you ended up having a lot of oil and gas folks that landed in Fort Worth — I think there is a possibility for Fort Worth to become a bitcoin mining-centric city,” Bratcher said.

No federal registry for cryptocurrency mine locations exists. However, websites have collected information based on news articles and press releases. Data compiled by Fractracker Alliance in November 2022 found 23 mines in the state that are either operating or under construction, including 10 near Midland and Odessa in West Texas.

What is a cryptocurrency mine?

Cryptocurrency miners are computers that solve complex mathematical problems. Machines around the world compete to be the first to solve it. The first mine to solve the problem is awarded an amount of cryptocurrency, which has monetary value. Most mining facilities have around 10,000 to 20,000 mines, but the largest have around 100,000.

Several of the mining facilities are considered large, with many having a capacity of over 200 megawatts, according to an analysis by the U.S. Energy Information Administration.

Texas leads the nation in large mines, with 10 that use enough power to support more than 30,000 homes, according to The New York Times. Thirty-four mines across the country use more power than 30,000 homes. New York is second, with four.

By moving to Fort Worth in September 2022, Scaggs said Advanced Crypto Services is primed to serve mines across Texas.

“It’s pretty well-located to the miners that are out toward Abilene, also Midland-Odessa. It’s not crazy far down toward Austin, which is where we have another good like batch of customers,” Scaggs said.

Long before the city itself joined the market, the world’s largest bitcoin ATM operator, Coinsource, was founded in Fort Worth in 2015.

Consensys, a blockchain software company, announced its relocation to the city around the same time as the 2023 North American Blockchain Summit in Fort Worth.

Blockchain is a digital database that stores information. In cryptocurrency systems, the blockchain stores a record of transactions. Blockchain differs from other digital databases in that it’s decentralized, meaning no one computer has control over the system. Any information uploaded to the blockchain is irreversible.

What is blockchain?

The state’s “pro-crypto policies” and the vibrant entrepreneurial ecosystem in Fort Worth prompted Consensys’ move from New York, said Simon Morris, chief strategy officer at Consensys.

“It’s encouraging to be surrounded by a community that values innovation and economic independence,” Morris said by email.

Double-edged sword

Fort Worth’s bitcoin mining program began in 2022 with three machines donated by the Texas Blockchain Council. Two months in, the city replaced the miners with a donated newer machine.

When the pilot program concluded in November 2022, Capua called it a success and recommended the machines continue mining. The launch of the program generated more than 752 million web impressions in those first six months, according to city officials.