Fort Worth, Texas, Becomes First American City to Mine Bitcoin

Fort Worth Mayor Mattie Parker (R) and former Mayor Betsy Price (L) look at early voting results at a gathering in Fort Worth, Texas, on June 5, 2021. Yffy Tossifor/Star-Telegram via AP

The city of Fort Worth, Texas, has become the first city government in the United States to mine bitcoin, advancing its goal of becoming a leading center of tech and innovation, city authorities announced on April 26.

The bitcoin mining pilot program was launched by the Office of Fort Worth Mayor Mattie Parker and the City of Fort Worth in a joint partnership with the Texas Blockchain Council, officials said.

Three bitcoin mining machines will run 24/7 in the climate-controlled information technology center at Fort Worth City Hall. The machines—donated by the Texas Blockchain Council—will be housed on a private network as a security measure.

“Today, with the support and partnership of Texas Blockchain Council, we’re stepping into that world on a small scale while sending a big message—Fort Worth is where the future begins,” Parker stated. “These small but powerful machines mark Fort Worth’s larger commitment to becoming a leading hub for technology and innovation.”

By initially testing out just three mining machines, the city will be in a position to manage the program while also assessing its benefits. After six months, the city will reevaluate the program.

Taking into account the type and number of mining machines being used, Fort Worth is estimating that each unit will consume energy equivalent to that of a household vacuum cleaner. The value of the bitcoin mined is expected to offset the nominal energy costs.

Parker got the idea of starting a bitcoin mining rig in the city after conversing with a few friends from the venture capital (VC) world who informed her that about 80 percent of VC funds are spent in the tech industry, with cryptocurrency being a very attractive opportunity, CNBC reported.

Fort Worth is teaming up with mining pool Luxor Technologies, which allows a single miner to combine its mining power with thousands of other miners globally. According to Alex Brammer, vice president of business development for Luxor, the decision to mine bitcoin will strengthen the cryptocurrency’s legitimacy as a strategic asset.

“In the future, it is likely that bitcoin mines will sit alongside industrial-scale battery storage to provide grid-firming services that prevent blackouts and other interruptions to the grid caused by the addition of intermittent wind and solar generation,” Brammer told CNBC.

“In this context, it would make sense for cities to start to fund and build large-scale mining infrastructure themselves,” he said.

Following China’s crackdown on the cryptocurrency industry in 2021, the United States emerged as a destination for mining, with Texas being especially attractive due to its mining-friendly laws and cheap power.

States like California and Arizona are exploring the possibility of making cryptocurrency legal tender. Meanwhile, lawmakers in New York have advanced a bill aimed at imposing a moratorium on certain cryptocurrency mining operations for a period of two years.

Despite its rising popularity, bitcoin remains a highly volatile asset with wild price swings, unlike traditional currencies such as the U.S. dollar. After peaking above $68,500 in November 2021, bitcoin is currently trading at about $39,300 as of April 28, a decline of over 42 percent in a span of about five months.