The City Council unanimously approved a resolution Tuesday making Fort Worth the first city in the United States to mine bitcoin.
The resolution authorized a six-month pilot program teaming the city and the Texas Blockchain Council, which is donating three S9 Bitcoin mining machines. They will run around the clock, seven days a week, in the climate-controlled Information Technology Solutions Department Data Center in City Hall, housed on a private network to battle security risks.
The Texas Blockchain Council is a nonprofit association made up of companies and individuals that work in bitcoin, crypto and blockchain technology.
Mayor Mattie Parker said that by expanding into the blockchain and cryptocurrency industries, Fort Worth will advance its goal of becoming a leading hub in technology and innovation.
“With blockchain technology and cryptocurrency revolutionizing the financial landscape, we want to transform Fort Worth into a tech-friendly city” Parker said. “With the support and partnership of the Texas Blockchain Council, we’re stepping into that world on a small scale while sending a big message: Fort Worth is where the future begins.”
Bitcoin is a form of cryptocurrency, which is a medium of exchange, like the dollar, but is digital and uses encryption techniques to control the creation of monetary units and verify transfer of funds. “Mining” is performed using sophisticated hardware that solves an extremely complex computational math problem – a “proof of work” formula. The first computer to find the solution to the problem receives the next block of bitcoins, then the process begins again.
Bitcoin can now be purchased at thousands of ATMs globally. The state of Texas has over 4,200 bitcoin ATMs, including more than a thousand in the Dallas-Fort Worth area, according to the Coin ATM Radar website.
In mid-March, the city of Austin began studying “what it would mean for the city to adopt, use or hold cryptocurrency,” according to a news report by Austin radio station KUT.
“Fort Worth has always been a leader in many industries, including technology,” said District 3 Councilman Michael D. Crain. “With the wider global acceptance of cryptocurrency, this move shows that Fort Worth is once again on the cutting edge of innovation and encouragement of creative tools to spur economic development.”
District 5 council member and Mayor Pro Tem Gyna Bivens said she voted yes because, “This resolution launches a pilot program positioning Fort Worth to become the first city in the entire nation to actually mine bitcoin. This is major.”
The first bitcoin was mined in 2009 and cryptocurrency now is accepted as payment by more than 2,000 businesses in the United States and 15,000 around the world, according to Investopedia, which ranked San Francisco the world’s No. 1 city for bitcoin with Miami seventh and New York ninth. In 2021, Investopedia says, El Salvador became the first nation to officially make bitcoin legal tender.
A city staff report accompanying the bitcoin resolution noted that the state Legislature passed a bill last year recognizing cryptocurrency in the state’s Uniform Commercial Code, and another bill establishing a 16-member work group to develop a master plan for the expansion of the blockchain industry in Texas. In early March, the report said, President Joe Biden issued an executive order directing certain executive branch departments and agencies to establish a framework to ensure United States leadership in digital asset innovation.
Nasdaq.com reported record-breaking 2021 investments of $30 billion in venture capital funds in the industry with $7.2 billion coming from United States-based investors.
“The Texas Blockchain Council is thrilled to be part of this first-of-its-kind pilot program as the city of Fort Worth begins mining bitcoin,” said Lee Bratcher, president and founder of the Texas Blockchain Council. “By starting small to learn as they go, Fort Worth is positioning itself to be the bitcoin mining capital of Texas.”
The city will evaluate the program after six months, officials said. Based on the number and type of machines being used, the city estimates each will consume the same amount of energy as a household vacuum cleaner. The nominal amount of energy needed for the program is expected to be offset by the value of bitcoin mined.
Officials say keeping the pilot program small enables them to learn the potential impact and opportunities for bitcoin.
“This initiative demonstrates that Fort Worth, as a city, is serious about attracting innovative, tech-focused businesses. It’s part of a broader culture of innovation that we’re particularly focused on at the city level,” said Robert Sturns, the city’s economic development director.
“We’ve long talked about Fort Worth’s association with the frontier and our pioneering spirit,” Sturns said. “There are other frontiers out there today that we need to be engaged with. Our city contains companies that are pushing the boundaries of not only technology, but also energy, biotech, logistics – all on a daily basis.”
“Texas is increasingly being recognized as the global leader in bitcoin and blockchain, and Fort Worth will have a seat at that table,” Sturns said. “The pioneering spirit is alive and well in Fort Worth, and with this program we will attract dynamic companies that share in this vision for the future.”