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Bitcoin mine brings hope to Central Texas town devastated by job losses

Bitcoin mine brings hope to Central Texas town devastated by job losses
31 Jul
10:26

ROCKDALE, Texas (KXAN) — There’s a lot of “used to” in Milam County these days.

The people there used to have the Alcoa aluminum smelting facility until it closed a decade ago. They used to have the power plant before Luminant closed it earlier this year. They used to have hundreds more jobs.

Now the small town of Rockdale, about an hour northeast of Austin, is hoping the days of “used to” are used up.

A Chinese company plans to open a Bitcoin mining operation in part of the old Alcoa plant just outside of town, bringing with it the prospect of 300-500 jobs, according to local media reports.

It’s not the mining Milam County is used to, but without the jobs the area lost, it’s redefining itself for a modern economy, and the mine is just the beginning.

“We’re still trying to survive here in this little town,” Henry Miller said last week. 

Like most, he’s heard about the new digital mine coming to the area. Just a mention of Bitcoin in a place like Lee’s Landing, a restaurant and gathering place for locals where Miller was enjoying a bowl of green beans, gets customers speculating as to what it might mean for the town.

The 61-year-old has lived in Rockdale his whole life, working at the Luminant power plant and then as an independent contractor at the site. He retired before the plant closed, but like everyone in Rockdale, he still felt the impact.

“We thought sure the plant was going to be here for years and years and years to come, but it’s not,” he said. “We didn’t think it was going to close its doors, but it did.”

The prospect of a high-tech mining operation is energizing.

“That was my first thought. Second thought was, what the heck is it?” Cindy Bolch, another customer, said with a laugh. “I have no idea.”

Mining Bitcoin uses specialized hardware and software to solve complex math problems that help make the digital currency’s transaction network more secure. In return for doing that work, the miner is rewarded in bitcoin.

The company Bitmain Technologies plans to announce the operation in the coming days, the company’s North American executive vice president and director of operations, Jeff Stearns, told KXAN.

There’s a lot of risk involved in opening an operation like that. The digital crypto-currency Bitcoin is volatile; the price of a single bitcoin now is around $8,000, but it’s been as high as $19,000 as recently as December. The often rapid change could jeopardize the long-term profitability of a digital mining operation, said Kyle Samani, managing partner at Austin-based hedge fund Multicoin Capital.

Samani’s fund is focused on crypto-currencies like Bitcoin, but it hasn’t put any money behind mining operations. “That tells you a lot about our long-term prospects for mining,” he said in an email. 

But that’s not stopping Milam County from hoping.

“These are technical jobs, these are well-paid jobs,” said Rebecca Johnson-Vasquez, chair of the Rockdale Chamber of Commerce and owner of Lone Star Guns & Goods on Main Street.

They’re the kind of jobs the city is pursuing on all fronts. Milam County submitted a bid last year to be the new home of Amazon’s second headquarters, and while it didn’t make the cut, Johnson-Vasquez said the open space and low cost of living should be attractive to other tech businesses looking to relocate.

“We have the ability for any industry to come in that’s looking for land and looking for a place to plant themselves,” she said.

Some businesses appear ready to take the plunge. The Austin Business Journal reports several other high-tech companies are moving into the old Alcoa plant alongside Bitmain, and the city of Rockdale is poised to train the workforce those companies need.

The Municipal Development District is preparing to apply for a $900,000 federal grant for distressed coal communities, the district’s executive director, Kara Clore, said. The money would go toward building or renovating a space to attract some type of higher education institution.

Milam County used to have a branch of Temple College, she said, but it left its home in Cameron years ago, and now people raised in Rockdale have to go elsewhere to train for technical jobs.

With the grant, Clore said, the city would try to convince another school, like Texas State Technical College, to open a satellite campus in Rockdale.

“If that happens,” Johnson-Vasquez said, “we would have the ability to train our own” to fill the jobs tech companies would bring to the county. 

“I hate to see young people that want to stay here and can’t because they have to move other places to go to work,” said Miller, the former Luminant employee. “I mean, you got to make a living.”

More young workers staying closer to home to train for those jobs would mean more young homeowners and more young taxpayers. It would mean a future the city of Rockdale could count on.

“We’re just hoping for the best,” he said, “for whatever comes here.”

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