MIAMI – Mayor Francis Suarez says Miami’s doors are open to bitcoin miners in China currently looking for a new home after Beijing made it clear their days are numbered.
Mining is the energy-intensive process that both creates new coins and updates the digital ledger of all transactions of existing tokens. More than half of all miners are currently based in China, but a mass exodus is already underway. However, it is not yet clear where the journey is going.
While Suarez told CNBC that he personally did not receive calls from Chinese miners, the mayor is trying to patrol this mining diaspora by promoting the city’s virtually unlimited supply of cheap nuclear energy.
“We want to make sure our city has a chance to hold its own,” he said. “We talk to a lot of companies and just tell them, ‘Hey, we want you here,'” he said.
Roll out the red carpet
Bitcoin miners are location-independent; All you need is a rig and a good internet connection. However, what differs from place to place is the cost of energy. And ultimately, what miners care about most is finding the cheapest source of electricity to increase their profit margins.
Because of this, Mayor Suarez, one of the most crypto-friendly politicians in the United States, is making big promises about the cost of doing business in Miami. Suarez has been a crypto believer for years, but he took the plunge into Bitcoin and Ethereum when he saw the federal government pass a US $ 1.9 trillion bailout because he “realized that what was inevitable – and has already happened – is inflation. “
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He emphasized the city’s dependence on nuclear power as a source of clean and inexpensive energy.
“The fact that we have nuclear power means it’s very cheap,” Suarez told CNBC in an interview from a conference room on the second floor of the Miami City Hall building.
Less than an hour from City Hall is the Turkey Point nuclear power plant, which, according to the Energy Information Administration, provides Miami with electricity. The Bureau of Labor Statistics reported average electricity costs per kilowatt hour in Miami of 10.7 cents, versus the national average of 13.3 cents.
Florida Power and Light workers Juan Madruga (R) and Pehter Rodriguez (L) give at the Turkey Point Nuclear Reactor Building in Homestead, Florida May 18, 2017.
Rhona way | AFP | Getty Images
In the entire state of Florida, nuclear power is the second largest generator of electricity after natural gas. Suarez is already in talks with Florida Power & Light Company to find out how energy prices can be further reduced.
“We understand how important this is … miners want to get a certain kilowatt price per hour. And that’s why we’re working on it with them, ”Suarez told CNBC.
The mayor is also considering a mix of other incentives, such as corporate zones specifically for crypto mining. Corporate zones are areas where businesses are offered tax breaks, infrastructure incentives, and reduced regulations in the hopes that these disruptions will stimulate investment and create jobs.
Miami is not alone in its ambitions to attract the attention of bitcoin miners.
“In North America there is a demand … so the question will be one of the capacities,” said Alyse Killeen, founder and managing partner of Bitcoin-focused venture company Stillmark.
In terms of physical infrastructure and capacity, the mayor is optimistic that the city can meet the miners’ needs.
“We were one of the first cities in the world to have a data center, and a mining hub is very similar to a data center,” he said.
But even Suarez admits that a lot has to happen first.
“Building a mining facility is similar to building a data center. It doesn’t happen overnight, ”Suarez told CNBC.
Miami also does not compete in a vacuum here in the US like Texas and Wyoming are also quickly becoming hot-mining destinations thanks to their cheap energy mix and crypto-friendly policies.
The pollution debate
Mayor Suarez is not the only one who advocates the benefits of using nuclear energy.
The federal government is calling nuclear energy “an emission-free clean energy source,” and tech billionaire and climate protection evangelist Bill Gates previously told CNBC that nuclear power will become “absolutely” politically acceptable again. Gates said new innovations make it safer and more affordable.
“Nuclear was actually safer than any other source of [power] Generation, ”said Bill Gates Andrew Ross Sorkin in CNBC’s“ Squawk Box ”. “You know, coal power plants, coal particles, exploding natural gas pipelines. The deaths per unit of power with these other approaches are much higher, ”said Gates.
However, the use of nuclear energy has some disadvantages. While nuclear power plants generate neither air pollution nor carbon dioxide when they are in operation, emissions are generated during the construction of nuclear power plants and the decommissioning of reactors.
And mostly the cheapest energy sources in the world are renewable. Taking all factors into account, solar and wind energy sources are the lowest cost and most scalable, making them a natural fit for mining, according to Killeen.
“The miners’ capitalist motivations push them to green energy,” she said.
Whether Chinese miners will actually move to Florida remains to be seen, but there are signs of progress in Miami’s quest to become a mining hotspot. Mayor Suarez says he is currently taking calls from various mining companies outside of China considering moving to the sunshine state.
The establishment vs. Bitcoin
Miami isn’t just after Bitcoin miners. The city aims to become a crypto destination for all types of professionals interested in space.
To attract them, the mayor has tried to make Bitcoin mainstream by advocating policies that allow city employees and residents to pay their taxes in the cryptocurrency. The city itself is considering keeping it on its balance sheet as an asset. Suarez says they now have legal approval to proceed and his office is currently going through the “request for a proposal” phase, which is the next stage in the approval process.
Although the crypto world is often viewed as an anti-establishment and anti-government, Suarez doesn’t believe the movement is at odds with his government.
“That’s why I got into crypto and that’s why there was such a crazy reaction because [people] saw that the government was not antagonistic; “The government didn’t try to kill them,” he said. “On the contrary … the city of Miami understands how fundamental it is to our future and how it could change the paradigm in the way people live.”
He also talked a little about climate change and the prospect of rising sea levels that will call into question the very existence of the city for years to come. Miami is a low altitude city and in recent years “dry day flooding” has become common.
“Miami will be 100% in 20 years,” he said, emphasizing the money and effort Miami is investing in resilience.
“I recognize it as a threat. You know, you can’t just stick your head in the sand and pretend it won’t happen, it doesn’t exist. We’re one of the few cities in the world that is actually providing a significant amount of resources, $ 200 million from our Miami Forever Fund. “He added,” And now our challenge is to become the most water resistant city in the world to be.”