Bitcoin made in Miami-Dade: S. Florida luring first massive crypto ‘mining’ operation
Miami-Dade may soon be getting its first industrial Bitcoin mining facility operation.
The city of Homestead is in talks to welcome a $15 million Bitcoin mining plant with thousands of computers that would use 10 megawatts of power — the equivalent to demand from at least 2,000 homes.
Mayor Steven Losner does not flinch at that wattage, saying in an interview with the Miami Herald that it would be the same as any other industrial group coming in and creating jobs and economic opportunity — though the exact number of jobs and economic impact from the Bitcoin mining are still being tabulated.
“It’s an opportunity for Homestead to have some new and unique streams of revenues — I call it a domino effect,” he said. “Once they come here, others in related or somewhat-related tech operations will say, ‘Hey, why are these guys in Homestead? Let’s see what’s going on.’ And the jobs — just the support services alone, other IT things, electricians, some construction.”
Why Homestead? It’s one of the few cities in Florida to have its own utility, Homestead Public Services. Per the proposed terms of the arrangement, the mining company, Redivider, would receive a specialized rate from HPS in return for an agreement to commit investments to the utility’s enterprise fund that could pay for something like a new park.
Redivider and project co-developer Esperanza Opportunity Fund announced earlier this month a strategic partnership that quoted Losner in support of the project. The announcement also cited a tentative agreement with the owner of Homestead-Miami Speedway to use land near the racetrack that has access to electrical and mechanical infrastructure needed to power “several thousand specialized computers used for Bitcoin mining and securing the Bitcoin network.”
Esperanza is led by a familiar name in South Florida: Jose Mallea, the chief of staff to former Miami Mayor Manny Diaz and former Miami-Dade Mayor Carlos Gimenez, and a former George W. Bush White House staffer. Mallea, who also serves as president of Biscayne Bay Brewing Co., says the value of the project could go up alongside the price of Bitcoin.
“So they would now have a big new customer,” Mallea said.
The project stands to be an even sweeter deal for Esperanza and Redivider, a small outfit whose employees are scattered around North America: The mining operation would be located in an opportunity zone. That means it could avoid paying capital gains taxes.
The proposal represents another instance of a trend popping up across the country: Industrial Bitcoin mining operations taking up residence in the U.S. in locations where power is cheap. In Texas, at least two facilities have located outside Austin; while another, in rural New York, has taken over a dormant natural gas plant.
That has raised concerns of environmentalists, who say Bitcoin mining creates huge power demand that damages the environment with increased carbon emissions and contributes to climate change.
In response, Losner says he envisions a scenario by which the project incentivizes purchasing from, or even building, solar power generator plants.
“So that in the long term there is not going to be that fossil fuel impact,” he said.
The head of Redivider, Tom Frazier, also said the the type of mining process his group would use, called immersion-cooling, is more efficient.
At least one other city official is tentatively on board: Julio Guzman, a councilman and the city’s vice mayor.
“I think Homestead needs to take advantage of having some of the lowest electricity rates in the state, and we should be promoting that to attract new business,” he said. “It’s a great opportunity for us,” he added. “However, it has to make sense.”
How does Bitcoin mining work?
▪ Bitcoin “miners” are actually just computer hard drives that are programmed to solve complex math problems.
▪ The math problems are linked to verifying transactions on Bitcoin’s blockchain.
▪ The computers race to verify the transactions on the block by solving a cryptographic puzzle.
▪ One user has described mining as a “global, statistical gamble” to compete for Bitcoin.
Knight Foundation invests $2.25 million in coding nonprofit
The Knight Foundation has announced it will invest $2.25 million in CodePath, a national nonprofit that seeks to expand diversity in computer science and engineering. The funds will provide ongoing support to students at Florida International University and launch new programs at Florida Memorial University and Miami Dade College.
This story was originally published November 28, 2021 at 1:00 AM.
