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(Kitco News) – Miami Mayor Francis Suarez is touting renewable energy for Bitcoin mining.
Mayor Suarez was recently featured on “The Best Business Show with Anthony Pompliano” podcast. He discussed the city’s role in Bitcoin adoption. He described China’s recent decision to ban Bitcoin mining as an “enormous geopolitical strategic opportunity” for the United States. As it turns out, Mayor Suarez has been in discussions with power companies and miners alike about the proliferation of clean energy mining.
Bitcoin mining is the process by which transactions are verified on the blockchain and new coins are minted. This practice has come under fire for its energy consumption. Tesla CEO Elon Musk cast a shadow on Bitcoin in May, when he criticized its dependence on dirty fossil fuels, especially coal, for mining and transactions. His remarks triggered a sell-off in the Bitcoin price at the time from close to $60,000 to almost $30,000. While the Bitcoin price has since recovered from those lows, it has been stuck in the doldrums of late, currently hovering around $43,100.
Reggie Raghav Jerath, founder and CEO of crypto mining firm Gather, told Kitco that the dynamics for Bitcoin mining are currently favorable.
“Mining is being used as a hedge right now. The payback periods aren’t very long if you invest in hardware. Nations are doing it. Demand for mining is going up and it is going to keep rising and getting more competitive,” he said.
Miami’s Mayor Suarez believes that the ESG issue has been “manipulated,” saying the Bitcoin community has been “unfairly characterized as one that doesn’t care about ESG.” He believes that the opposite is true, and Bitcoin miners are focused on being carbon neutral with no dirty emissions, which were more a byproduct of mining activities in China.
“China shutting it down is a massive opportunity for this country…We have to be careful that none of our laws antagonize this burgeoning innovation,” said Mayor Suarez on the podcast.
Gather’s Jerath explained to Kitco how the computing power that was once dedicated to China is now being redirected.
“Not long ago, the China Bitcoin mining ban happened, and 1,000 MW of capacity needed to be relocated. No one place could handle all that capacity, so it’s being broken up and going all over the place — 7 KW, 10 KW, 12 KW, etc. Not too much of it is going to the United States unless there are special electricity rates. Most of it is going to South America, Canada, Russia, Sweden, Norway and the UAE,” he said.
Jerath also touted renewable energy sources such as solar for Bitcoin mining, which has become increasingly economically viable.
“The biggest barrier here is cost. Solar panels are a good example. Two or three years ago, they were so expensive that it didn’t make sense to be using solar power for ASICs miners. Now solar panels are cheaper, so the payback period is shorter,” he said.
For its part, Gather provides processing power for mining technology, which is collected when users visit a website and provide their consent for their computer or mobile phone to contribute the idle processing power to be used for mining. Jerath explained that this requires the same amount of resources as watching a video.
Suarez, meanwhile, believes there is absolutely a path forward for nuclear power generation-fueled Bitcoin mining, adding that nuclear is only one of the options for clean and cheap electricity. It may be pricey from the capital side to start, but it becomes quite inexpensive once it is in place. In Miami, in particular, rates are among the lowest in the country.
Suarez also pointed to solar power, hydroelectric and natural gas, suggesting that producers can tap into pent-up demand via underproducing energy assets that are clean and put them to good use, something that companies in Florida are already exploring.
Mayor Suarez said Miami is weaving itself into the “Bitcoin capital of the world narrative,” and he is doing his part to make Florida the “most crypto-friendly state.”
In October, the city of Miami will introduce an RFP to secure a vendor to let the city pay its employees in Bitcoin. Meanwhile, cryptocurrency exchange Coinbase just announced that it will allow U.S. users to receive their paycheck in USD or crypto directly into their Coinbase account.
Miami city officials are also exploring a way to make it possible for residents to pay their taxes, which flow through the county level, in Bitcoin. The mayor is also looking into holding Bitcoin on the city of Miami’s balance sheet, which could require changes to the state law. He said,
“Everyday Bitcoin is more mainstream, it is a good day for the city to hold it as an asset, particularly with the inflation we have seen in the CPI in recent months,” Suarez said.
For Bitcoin to reach mass adoption, however, Gather’s Jerath said he believes the industry must make a paradigm shift to lessen its carbon footprint.
“The increasing need of mining equipment and the energy consumption created by crypto companies must be reversed with innovative technologies like green mining and other renewable energy sources. For this industry to reach mass adoption, it should be willing to acknowledge the obvious threats caused by it. There’s no other way around. The whole industry needs to act on it and take necessary steps to be completely carbon neutral if it’s possible,” said Jerath.
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