Business 14 January 2019Erik Gibbs
Bitmain shuts down Texas mining operations
Rockdale, TX was once a thriving coal-mining town before advancements in energy production found ways to produce electricity cheaper and more efficiently. Once that happened, the southern Texas town almost ground to a halt, turning into virtually nothing but a ghost town, populated more by tumbleweeds than people. Bitmain, the once giant China-based cryptocurrency mining company, offered to turn things around, bringing promise of new jobs and new hope to the struggling people of Rockdale. Now, less than a year after giving locals a boost of energy and optimism, Bitmain has dashed those dreams and has suspended its operations in the town.
Bitmain had said that it would launch the largest cryptocurrency mining operation in Rockdale, alongside a data center. After a steady loss of local income of around 30% over the past several decades, the operations were a promise of a brighter future for Rockdale. Milam County Judge Steve Young, in referring to the announced closure, said it best when he asserted, “I’m really disappointed because we had advertised this. We had waited for this. We had wanted this. We had welcomed this. This was huge, we need some positive news here. We need some jobs here. We need tax base here and this was a step in the right direction.”
According to Young, all employees of the crypto mining company in Rockdale have been laid off, except for two engineers and the director of human relations. He added that all operations were suspended, but has received reassurances from Bitmain that, in some capacity, the facility will continue to operate.
Bitmain had anticipated a $500 million investment and the ability to provide 400 local residents with jobs. It already had in place as many as 8,000 servers, according to Young, but the drop in Bitcoin Core’s (BTC) price has been damaging to the company’s business model. It hasn’t been able to move mining rigs as it once anticipated, leaving the bulk of its assets in hardware that it cannot move. It also took a massive hit after the markets settled and Bitmain has not been able to recover since.
The company already shut down a number of operations around the globe. It has had to let go more than half of its workforce and closed its office in Israel. Out of the 400 employees expected to work at the Rockdale facility, there are now only five. Whether or not Bitmain will be able to keep these people employed, or be yet the source of further disappointment for locals, will depend on whether or not it can right the ship after ousting its former boss, Jihan Wu.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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