Fort Worth embraces cryptocurrency, becomes first city in U.S. to mine Bitcoin
Fort Worth Mayor Mattie Parker wants the world to know Cowtown is open to cryptocurrency.
Amid Twitter fanfare April 26, Fort Worth became the first city government in the nation to mine its own Bitcoin.
Parker was eager to share the news. She streamed herself on Twitter inside Fort Worth’s data center in City Hall as she connected wires to turn on three small Bitcoin mining machines on April 26.
“I’ve been joking that we’re Cowtown and cryptocurrency, right?” Parker said on the stream. “It’s all happening in Fort Worth.”
Standing beside Parker, Lee Bratcher, president of the Texas Blockchain Council, described Texas as the epicenter for Bitcoin mining globally. Now, he said, Fort Worth is taking steps to become the capital of Bitcoin mining in the state.
Bitcoin is a type of cryptocurrency, a digital currency that is not backed by an establishment such as a bank. To make sure each Bitcoin transaction is verified, machines in a network compete to solve a complicated math problem. If the machine solves it first, it becomes the official record of the transaction. A Bitcoin is given in exchange as an award to the first miner that solves the math problem. This process is called mining.
The city of Fort Worth will mine with three Bitmain Antminer S9 machines donated by the Texas Blockchain Council — an organization made up of companies and people working in the cryptocurrency industries. The miners, worth $2,100 altogether, will operate 24 hours a day at the Information Technology Solutions Department at Fort Worth City Hall in a six-month pilot program.
The pilot program isn’t just about testing cryptocurrency, Parker said.
“It’s bigger than that,” she said. “We want to be a city that’s on the forefront of technology innovation. And what I’ve noticed lately is that any company that’s on the forefront of technology, they’re all talking about cryptocurrency.”
During the live Twitter conversation, Parker said she got the idea when she was running for mayor and started talking to Les Kreis, principal at Steelhead Capital, about how the city can be at the cutting edge of technology.
The city of Fort Worth has been trying to sell itself as an innovative place for tech workers to grow their companies or relocate. It recently established an entrepreneurship and innovation council committee and has funded the Techstars Physical Health Fort Worth Accelerator program, according to past reporting from the Fort Worth Report.
Some cryptocurrency advocates believe the industry has something to gain from city government officials dipping its toes in Bitcoin mining. The federal government is contemplating the use of a digital currency, and The Federal Reserve released a paper discussing the pros and cons in January.
Other countries, like China, have banned the use of cryptocurrencies, in fear of economic instability and to prevent financial crimes, according to the World Economic Forum.
People in the industry have promoted the idea that cities, states and the national government should mine Bitcoin, Dennis Porter, a Bitcoin advocate who hosted the Twitter conversation with Parker, said.
“So to have a city actually doing it now, it’s almost like a dream come true, I’m sure, for a lot of miners in the space,” Porter said during the stream.
Parker said the program will be operated by a combination of her office, the Texas Blockchain Council and the city of Fort Worth’s IT department.
Texas has been open to the entrance of cryptocurrency companies. Last year, legislators passed a law that recognized cryptocurrency in the state’s Uniform Commercial Code. Another law established a panel to develop a plan for the expansion of the blockchain industry. The city of Denton recently saw the entry of a cryptocurrency mining site.
The amount of money the machines make from mining Bitcoin will be small, and the machines take up the same amount of energy as a vacuum cleaner, Parker said.
That isn’t exactly true. Some criticism of Bitcoin mining focuses on the massive amount of energy it takes up, according to reports. And mining machines take up more power over time, Kelly Slaughter, an associate professor with expertise in fintech at Texas Christian University, said.
As the computers get more powerful and better at solving problems quickly, the servers make the problems more difficult. That makes the computer work harder, which means it takes more energy. It does take up energy, he said, but so do other servers.
“Something that IT has been working on for decades is how do we get the servers to use less electricity?” Slaughter said. “So I don’t know if Bitcoin would really be as prominent as if it was ranked into what else actually takes electricity.”
Cryptocurrency is a transparent process, he said. If people know the account address number, they can see all the transactions made. He said that it could make the city government more transparent if it started doing transactions via a cryptocurrency system and published its account address.
“You actually now have a public ledger, that in my mind makes the city government more accountable to the population than ever. I can actually look real time and see whatever tax collections they’ve been making,” Slaughter said.