Cities Starting To Mine Bitcoin
Bitcoin mining is a highly competitive industry. It's an ecosystem of home miners, industrial miners of various sales, and several publicly traded companies actively mining.
We've even seen countries mining bitcoin in the form of El Salvador and Venezuela and how knows there could be countries who are smart, that are mining and shutting up about it so they don't spook the market FOMO and allows them to slowly chug away and increase their positions.
It's amazing to see how something that started out as an exe file on your computer, which you could install and earn 50 BTC every 10 minutes with no special hardware has turned into this massive industry in only 13 years.
Competition heats up
As more people realize the value of a bitcoin position, it will start to reach more areas of the economy. The hobbyists got their first, then the startups, now the corporates, and would you believe it boring old cities are now mining bitcoin.
Yes, that's right the city of Fort Worth, in Texas. The mayor of the city has had three Bitmain Antminer S9 mining rigs set up in their city hall. The miners will run 24 hours a day, seven days a week, in the climate-controlled information technology wing of City Hall.
The city also says that the miners are hosted on a private network to minimize the security risk. We have to remember that they are spending state funds to set up this operation and this bitcoin is now part of the city's balance sheet, like all the taxes or bonds it's able to raise, Fort Worth now has an additional stream of income.
The city says that this is only a trial and if after six months, Fort Worth the results meet their expectations, they will decide whether to sink real cash into building out a larger mining operation.
Check out the mayor's review here
First mover advantage
While Fort Worth does have the first-mover advantage on literally every city in the world, it doesn't mean they will benefit from it, perhaps in learning yet but not necessarily in profits. To mine bitcoin is only one part of the equation, keeping hold of it is another part entirely, as we see with hobby miners and industrial miners.
Since cities aren't like companies, where they can decide what is best for the shareholders, having an increased bitcoin stack or bitcoin mining operation at the expense of other city services could become a contentious issue.
In addition, if the cities' bitcoin coffers grow, there will be calls to spend it and we know governments of any kind aren't the best at capital allocation so I am sure a lot of that bitcoin will be wasted and misallocated.
Remember these miners aren't set up by people who have real skin in the game, they don't know about profit and loss or running at a loss short term to maintain a profit long term. Governments don't understand how capital and equity work, they only know how to tax it and waste it.
While I am all for improving the hash rate on the network, I don't see this as too bullish, even if 100 cities started doing it. I just see it as costly mistakes that plebs like myself will benefit from because we have the battle scars and temprement.
Sources:
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