MIAMI – Mayor Francis Suarez says Miami’s doors are open to bitcoin miners in China who are currently scrambling to find a new home after Beijing made it clear that their days are numbered.
Mining is the energy-intensive process that both creates new coins and updates the digital ledger of all existing token transactions. More than half of all miners are currently based in China, but a mass exodus is already underway. Where they are going, however, is not yet clear.
While Suarez told CNBC that he has not personally received any calls from Chinese miners, the mayor is seeking to repatriate this mining diaspora by promoting the city’s essentially unlimited supply of cheap nuclear power.
“We want to make sure that our city has the opportunity to compete,” he said. “We talk to a lot of companies and just say, ‘Hey, we want you to be here,’” he said.
Bitcoin miners are location independent; all they need is a platform and a good internet connection. However, what varies from place to place is the cost of energy. And at the end of the day, what matters most to miners is finding the cheapest source of energy to increase their profit margins.
That’s why 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 fan for years, but he took the plunge investing in bitcoin and ethereum once he saw the federal government adopt a $ 1.9 trillion US bailout. because he “realized that what was inevitable – and is already happening – is inflation.”
He highlighted the city’s dependence on nuclear power as a clean and inexpensive source of energy.
“The fact that we have nuclear power means it’s very cheap power,” 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 helps power Miami, according to Energy Information Administration data. the Bureau of Labor Statistics Report an average cost of electricity per kilowatt hour of 10.7 cents in Miami, compared to the national average of 13.3 cents.
Florida Power and Light workers Juan Madruga (R) and Pehter Rodriguez (L) speak at the Turkey Point nuclear reactor building in Homestead, Fla., May 18, 2017.
Rhona Sage | AFP | Getty Images
In the entire state of Florida, nuclear power is the second largest producer of electricity, after natural gas. Suarez is already in talks with Florida Power & Light Company to determine how to lower the price of energy further.
“We understand how important it is … miners want to achieve a certain price per kilowatt per hour. And so we’re working with them on that, ”Suarez told CNBC.
The mayor is also considering a mix of other incentives, like corporate zones specifically for crypto mining. Enterprise zones are areas where tax breaks, infrastructure incentives and relaxed regulations are offered to businesses, in the hope that these breaks will encourage investment and create jobs.
Miami is not alone in its ambitions to capture the attention of bitcoin miners.
“There is demand in North America … so the question will be a question of capacity,” said Alyse Killeen, founder and managing partner of bitcoin-focused venture capital firm Stillmark.
Regarding physical infrastructure and capacity, the mayor is optimistic about the city’s ability to meet the needs of miners.
“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’s not something that happens overnight, ”Suarez told CNBC.
Miami is also not competing in a vacuum here in the United States. States like Texas and Wyoming are also emerging as popular mining destinations, thanks to their cheap energy mix and policies favorable to crypto.
Mayor Suarez is not alone in defending the benefits of using nuclear energy.
Federal government calls nuclear energy “A clean energy source with zero emissions”, and tech billionaire and climate change evangelist Bill Gates previously told CNBC nuclear power would become “absolutely” politically acceptable again. Gates said new innovations are making it safer and more affordable.
“Nuclear power is in fact safer than any other source of [power] generation, ”Bill Gates told Andrew Ross Sorkin on CNBC’s“ Squawk Box ”. “You know, the coal plants, the coal particles, the exploding gas pipelines. The deaths per unit of power on these other approaches are much higher, ”said Gates.
But there are some drawbacks to harnessing nuclear power. While nuclear reactors do not produce air pollution or carbon dioxide while in operation, emissions are generated during construction nuclear power plants and in the dismantling of reactors.
And more often than not, the cheapest energy sources in the world are renewable. All factors taken into account, solar and wind power sources are the cheapest and most scalable, making them a natural choice for mining, according to Killeen.
“The capitalist motivations of the miners push them towards green energy,” she said.
Whether Chinese miners actually move to Florida remains to be seen, but there are signs of progress in Miami’s aspirations to become a mining hotspot. Mayor Suarez says he is currently responding to calls from various mining companies outside of China that are considering relocating to Sunshine State.
Miami isn’t just looking for bitcoin miners. The city wants to become a crypto destination for all kinds of professionals interested in the space.
To attract them, the mayor tried to mainstream bitcoin by advocating for policies that would allow city employees to be paid and residents to pay their taxes in cryptocurrency. The city itself plans to hold it as an asset on its balance sheet. Suarez says they now have the legal authority to proceed and that his office is currently going through the “request for proposal” stage, which is the next step in the approval process.
While the crypto world is often seen as anti-establishment and anti-government, Suarez doesn’t think the movement is in conflict with his administration.
“That’s why I jumped into crypto, and that’s why there was such a crazy response, because [people] since the government was not antithetical; the government was not trying to kill him, ”he said. “On the contrary… the city of Miami understands how fundamentally important this is to our future and how it could change the paradigm in the way people live their lives.
He also spoke a bit about climate change and the prospect of sea level rise putting the city’s existence at risk for years to come. Miami is a low-lying city and “dry day flooding” has become common in recent years.
“100% Miami is still around 20 years from now,” he said, highlighting the money and effort Miami is putting into resilience.
“I recognize it as a threat. You know, you can’t just stick your head in the sand and pretend it’s not happening, it doesn’t exist. We’re one of the few cities in the world that is actually put in place a significant amount of resources, $ 200 million from our Miami Forever Fund. ” He added: “And now our challenge is to be the most water resistant city on the planet.”