The Virginia Beach government is getting into the mining business. The Bitcoin mining business, that is.
Now, if I already lost you, it's ok. I will start from scratch for people who don't know what Bitcoin is. Bitcoin is a crypto-currency. Typically, countries are the ones that issue currencies. They either peg the currency to a resource of value -- such as the gold standard that backed U.S. dollars until the early 1970s -- or use a fiat currency, which is only valuable because the government and investors say it is. Crypto currencies operate on the fiat model but instead of being propped up by a government, they are mined and traded by members of the community. Except, since they are not established by governments, they can be traded completely anonymously. Unlike other currencies which move through banking systems, cryptocurrencies operate under something called a block chain, essentially an exhaustive list of every single currency trade ever. Since those trades aren't attached to specific people, they can be made anonymously. While the U.S. Mint is responsible for printing new dollars to be added to the circulation, Bitcoin and other cryptocurrencies are "mined." There are plenty of resources out there that can explain it better than I can, but essentially a computer or string of computers work on solving math algorithms. When Bitcoin first started, one computer's processing power could be enough to mine a Bitcoin. The tradeoff was that Bitcoins weren't worth all that much in the beginning. Today, with a single Bitcoin being worth more than $11k and more people trying to mine the currency, one single computer won't cut it anymore. So, miners set up entire warehouses of computers to mine the cryptocurrency.
A new mine set to open in Virginia Beach has already raised $65 million in startup capital. Yes, you read that right: $65,000,000 for a bunch of computers in a room to solve math equations to be rewarded with imaginary currency.
When you put it like that, it sounds a little silly for a municipal government to get involved with something like this. But Virginia Beach Economic Development Director Warren Harris believes that the grant award will be a winner for the area.
"Virginia Beach is again on the forefront of innovative technology, and we are extremely pleased that Bcause LLC will remain here," Harris said in a statement. "The cryptocurrency market is rapidly expanding, and we anticipate Bcause LLC will be at the forefront of this emerging financial system."In addition to the half-million-dollar grant, Bcause will also see reduced taxes on computers and other expenses related to construction of their new data center. The city is hopeful that their investment, though just a small piece of the capital already invested in the project, will help the mining company Bcause LLC hire more people in the area. The problem is that this sort of mining doesn't really require a whole lot of employees to manage. Instead, thousands of computers will use their combined processing power to mine the valuable cryptocurrency. Bcause LLC has leased 84,000 square feet of the former Hoffman Beverage building on Greenwich Road, just south of I-264, near Top Golf. Their plan is to become the largest Bitcoin mining operation in North America, so they have the option to add on an additional 21,000 square feet of space available in the future. What do you think? Should Virginia Beach be in the Bitcoin mining business? Let us know in the comment section below!