A year ago, Fort Worth Mayor Mattie Parker joked the city was now “cowtown and cryptocurrency” after plugging in donated bitcoin mining machines. That news generated millions of web impressions across the world, a nominal amount of money and attracted a blockchain summit to the city.
Since the peak of the industry’s hype in 2021 and the city’s adoption of the machine, the cryptocurrency market lost more than $2 trillion in 2022. Startups, job postings and venture capital fundraising around the crypto industry have also dropped.
Fort Worth city officials are leaving the machine donated by the Texas Blockchain Council running, despite the hype around the industry slowing down. The city will not disclose the amount of money it takes to keep the machine running.
Fort Worth first adopted two bitcoin machines in April 2022, becoming the first city to mine bitcoin. Quinn PR crafted a media campaign to promote Fort Worth’s tech-friendly leadership. The media attention generated more than 752 million web impressions in six months, according to the city. Headlines in national news outlets, such as USA Today, read: “Fort Worth, Texas becomes first in the US to mine bitcoin: ‘Where the future begins.’”
In interviews with major TV news outlets, Parker said the pilot project was about making the city at the forefront of tech and innovation.
What’s bitcoin? What’s mining?
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.
“We want to be at the forefront of this industry, and understand that cryptocurrency is synonymous with innovation right now across the United States, really across the world,” Parker said in an interview on CNBC when the project was announced.
Critics of the crypto industry cite concerns about the machine’s energy consumption in a state with a fragile power grid. The Texas Blockchain Council, the industry association that donated the three machines, and city officials maintained the machines take up the same amount of energy as a vacuum cleaner.
Two months later, the city traded the machine for a more energy-efficient machine. Carlo Capua, chief of strategy and innovation at the City of Fort Worth, recommended keeping the machines going at a city council meeting last November. The miner running in the city’s server room has generated nearly $2,000 after electricity costs since being plugged in, Capua said.
“The goal wasn’t to make money, that wasn’t the primary objective,” Capua said. “It was for people to know about the city, know that Fort Worth is a dynamic, forward-thinking city and doing innovative things that no other cities have done. So in that sense, it’s been very successful.”
The mining machine is profitable every month, Capua said, but he declined to provide the total energy cost since it was plugged in. The machine, a Bitmain S19 J Pro, takes 2,950 watts to operate. The city runs the machine 24 hours a day, seven days a week.
“Our rate with our energy provider is confidential, so I’m afraid I can’t share the total electricity cost as it would be easy for someone to reverse engineer our rate,” Capua wrote in an email.
One tangible result of the pilot program is the Texas Blockchain Council moving its Texas Blockchain Summit from Austin to the Fort Worth Convention Center in November. Lee Bratcher, president of the Texas Blockchain Council, said the council decided to move the summit because of the city’s friendliness to the industry. He expects more than 1,000 attendees at the summit, which occurs Nov. 15-17.
“We’re really excited about that and excited for what that means for the city and for the leap of faith that Mayor Parker took when she decided to do this initiative,” Bratcher said.
A tumultuous year for the crypto industry
Fort Worth’s mayor wasn’t alone in following the crypto hype, Tonantzin Carmona, a David Rubenstein Fellow at Brookings Metro, said.
New York City’s Mayor Eric Adams announced his first paycheck would be converted to bitcoin and ethereum in 2022. Austin business leaders and officials also tried to draft resolutions to make the city a hub for cryptocurrencies and blockchain. In Miami, the mayor endorsed a city-branded coin, only for it to drop 95% in price.
Mayors and local leaders are under pressure to innovate, create new economies and bolster existing ones, Carmona said, and it makes sense to look to technology and innovation as potential ways to spur economic growth. But leaders need to do their due diligence to weigh the pros and cons of the industry.
“Assessing, one, is it even right for our economy?” Carmona said. “Do we have a strategy around this? Do we have an existing infrastructure or ecosystem of other types of … industry that can help support this new industry or technology that we’re trying to bring to our local economy?”
The cryptocurrency industry had a tumultuous year. Toward the end of 2022, the crash of Sam Bankman-Fried’s crypto exchange, FTX, sent crypto values spiraling.
An analysis by Brookings Metro found job postings with crypto skills dropped since the peak in early 2022, including in the Dallas and Fort Worth area. Crypto startup growth also fell. Carmona, the author of the study, said most of the crypto jobs happened in places that were already tech hubs.
The city purposely took a more cautious approach to crypto than Miami’s “full-throttle” approach, Capua said. The city does not endorse the crypto industry – or any industry, Capua also said. He doubts cryptocurrency will ever replace the dollar, but he still thinks the pilot project was worth the time.
“I think the smart way to … investigate innovative technology is to do it in small steps,” Capua said. “And that’s what we’ve done.”
The mining machine, Capua said, continues to keep the city relevant. He gives anecdotes of visitors traveling to City Hall asking about the machine. He still mentions the machine when talking to people about innovative things the city is doing, and still gets requests for updates.
Carmona, however, remains skeptical about the impact of the pilot project and the accomplishment aside from literal attention. She said cities need to think about whether industries are speculative or have well-documented productive activity and potential.
“Cryptocurrencies, when you invest in them, aren’t tied to a company’s revenue profit, a company’s growth,” she said. “It’s just based on whether people believe that it’s going to rise in value or not.”
Mattie Parker was unavailable for an interview at the time of publication, but said in a statement that local leaders have to embrace out-of-the-box ideas in the community to fuel innovation. Parker wrote that the city is continuing to build on the mindset of expanding what’s possible in the city with the Techstars Physical Health Fort Worth Accelerator, Texas A&M-Fort Worth’s Research and Innovation Building and Alliance’s Mobility innovation zone.
“We’re seeing Fort Worth transform into a hub for technology, and it’s not just because of the pioneering spirit of our entrepreneurs, but also because City Hall has a vested interest in helping them be successful,” Parker wrote. “This program is just one example of how we’re looking to expand the conversation about what is possible in Fort Worth.”
Those involved in the crypto industry, like Bratcher, say the crypto market has ups and downs like the oil and gas market. The industry is still recovering, but Bratcher believes crypto is on the upswing.
“Just like there have been tumultuous times in other innovative technologies throughout history, the amount of economic growth that this industry is going to inject will be far greater than … some of the challenges that we experienced this year moving forward,” Bratcher said.
The mining machine will continue to run until the machine becomes obsolete or the City Council votes to stop the machine, Capua said. He’s shifting gears to other projects, like efforts to attract businesses from outside the U.S. like Japan to establish business in Fort Worth. He’ll be working with cities such as Dallas and Arlington to figure out transportation solutions as the World Cup in Arlington approaches in 2026. He also said there are a couple of development projects he can’t talk about yet.
The city created Capua’s position last year, and he said there are a lot of possibilities beyond adopting new technology.
“It’s a new position,” Capua said. “So to be quite honest, a lot of it, I’m looking for opportunities, where we haven’t really spent a lot of time.”
Seth Bodine is a business and economic development reporter for the Fort Worth Report. Contact him at seth.bodine@fortworthreport.org and follow on Twitter at @sbodine120.
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