Bitmain ends deal with Texas mining farm operator

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Chinese cryptocurrency equipment manufacturer Bitmain has, for the second time in as many years, rocked the foundation of Rockdale, Texas. It first announced that it would set up a data center in the economically-deprived city in August 2018 before scrapping the plans in January of last year. A revitalized effort would have seen the creation of a large cryptocurrency mining farm in the former mineral mining town, but those plans might now be scrapped, as well, according to an announcement this week by its business partner in the project, DMG Blockchain Solutions, Inc. Instead, it appears that the two will be concentrating their efforts in British Columbia and possibly elsewhere. 

DMG had been chosen, in October of last year, to manage the Rockdale facility for Bitmain. However, the companies have determined that it would not be in their best interest to continue, as, according to DMG’s announcement, the project has not materialized “cost and operational efficiencies” that would make it worthwhile. However, it adds that the two entities will continue to explore other partnership options. 

It isn’t clear if Bitmain will try to find another partner to operate the facility, or if it will scrap all of its plans completely. The company is mired in controversy and has faced a series of global layoffs and office closures as it tries to rebound from a string of bad business decisions. 

The good news is that Rockdale wasn’t solely relying on Bitmain to re-energize the local economy. SBI Holdings, a Japanese financial services firm, is planning on launching a crypto mining facility in the city in collaboration with GMO Internet. The operations will be conducted out of the 100-acre mining farm that was established by Germany-based Northern Bitcoin AG, through its Whinstone subsidiary.

DMG, on the other hand, is going to be increasing its efforts at its Christina Lake facility in British Columbia. The company’s announcement on the Rockdale reversal indicates that it has installed 1,000 new mining rigs for an unspecified client at the property, adding that Bitmain had supplied the equipment. Those rigs are expected to consume around 1.5 megawatts of power. 

Sheldon Bennet, the company’s chief operating officer, explains, “We are excited to begin working with this new client and are confident that they will be one of many we add during 2020. DMG made a decision to focus on attracting large scale hosting clients as profitable crypto-mining is a function of creating cost efficiencies, and our mining facility is well suited for industrial miners.”