Miami Mayor Francis Suarez tries to win over Chinese bitcoin miners

MIAMI – Mayor Francis Suarez says Miami’s doors are open for bitcoin miners in China currently struggling to find a new home after Beijing made it clear that their days are numbered.

Mining is the energy-intensive process that creates new coins and updates the digital ledger of all existing token transactions. More than half of all miners are currently in China, but a mass exodus is already taking place. However, it is not yet clear where they are headed.

While Suarez told CNBC that he has not personally received any calls from Chinese miners, the mayor seeks to patriot this mining diaspora by promoting the city’s essentially unlimited supply of cheap nuclear power.

“We want to make sure our city has the opportunity to compete,” he said. “We’re talking to a lot of companies and we’re just saying, ‘Hey, we want you to be here,'” he said.

Rolling out the red carpet

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 ultimately, what miners care the most is finding the cheapest power source out there 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 believer for years, but he jumped into investing in bitcoin and ethereum once he saw the federal government pass a $ 1.9 trillion US bailout plan, because “he realized that what was The inevitable, and already happening, is inflation. “

He emphasized the city’s dependence on nuclear energy as a cheap and clean source of energy.

“The fact that we have nuclear power means that it is very cheap energy,” 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 Plant, which helps power Miami, according to data from the Energy Information Administration. The Bureau of Labor Statistics reported an average electricity cost 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 (right) and Pehter Rodríguez (left) confer at the Turkey Point nuclear reactor building in Homestead, Florida, on May 18, 2017.

Rhona Wise | AFP | fake images

In the entire state of Florida, nuclear power is the second largest power generator, after natural gas. Suarez is already in talks with Florida Power & Light Company to figure out how to lower the price of energy even further.

“We understand how important this is… the miners want to come up with a certain kilowatt-hour price. And we are working with them on that, ”Suárez told CNBC.

The mayor is also considering a combination of other incentives, such as enterprise zones specifically for cryptocurrency mining. Enterprise zones are areas where tax concessions, infrastructure incentives, and reduced 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 issue will be capacity,” said Alyse Killeen, founder and managing partner of bitcoin-focused venture firm Stillmark.

When it comes to physical infrastructure and capacity, the mayor is optimistic that the city can meet the needs of the miners.

“We were one of the first cities in the world to have a data center, and a mining center is very similar to a data center,” he said.

But even Suarez admits that a lot of things must 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 US States like Texas and Wyoming are also fast becoming hot mining destinations, thanks to their combination of cheap energy and crypto-friendly policies.

The Pollution Debate

Mayor Suárez is not the only one who defends the benefits of using nuclear energy.

The federal government calls nuclear power “a zero-emission clean energy source,” and tech billionaire and climate change evangelist Bill Gates previously told CNBC that nuclear power will once again be “absolutely” politically acceptable. Gates said new innovations make it safer and more affordable.

“Nuclear power has been safer than any other source of [power] generation, “Bill Gates told Andrew Ross Sorkin on CNBC’s” Squawk Box. ” “You know, coal plants, coal particles, exploding natural gas pipelines. The deaths per unit of power in these other approaches are much higher, ”Gates said.

But there are some drawbacks to harnessing nuclear energy. While nuclear power reactors do not produce air pollution or carbon dioxide during operation, emissions are generated when building nuclear power plants and decommissioning reactors.

And most of the time, the cheapest energy sources in the world are renewable. All factors considered, solar and wind power sources are lower cost and more scalable, making them a natural choice for mining, according to Killeen.

“The miners’ capitalist motivations push them towards green energy,” he 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 answering calls from different mining companies outside of China that are considering moving to the Sunshine State.

Establishment vs. Bitcoin

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 draw them, the mayor has been trying to make Bitcoin mainstream by advocating for policies that allow city employees to receive payments and residents to pay their taxes in the cryptocurrency. The city itself is considering keeping it as an asset on its balance sheet. Suárez says they now have legal authorization to proceed, and his office is currently going through the ‘Request for Proposal’ stage, which is the next stage of the approval process.

Although the world of cryptocurrencies is often seen as anti-establishment and anti-government, Suárez does not believe that the movement has purposes contrary to his administration.

That’s why I jumped into crypto, and that’s why there was such a crazy response, because [people] he saw that 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 it 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 rising sea levels challenging the city’s existence for years to come. Miami is a low-elevation city, and “dry-day floods” have become common in recent years.

“100% Miami still exists in 20 years,” he said, emphasizing the money and effort Miami is investing in 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, that it doesn’t exist. We are one of the few cities in the world that is actually contributing 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.”

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