FAQ

Bitcoin is a decentralized virtual currency (cryptocurrency) that operates as a commodity that allows users to buy, sell and exchange goods and services without a bank. It’s similar to online cash: There are no physical coins or notes. Unlike flat or traditional currency, Bitcoin is created, distributed, traded and stored using a decentralized ledger system known as the Blockchain.

The Blockchain is a virtual ledger that stores data in blocks linked together. The information on the blockchain cannot be altered once created and is visible to all, making it a transparent data storage system. The name comes from the way the blocks are chained together in chronological order.

Bitcoin mining is like a competitive puzzle-solving game where miners use powerful computers to validate and add transactions to the Bitcoin ledger. The first miner to solve the problem and add the block to the Blockchain earns newly created Bitcoins and transaction fees.

Bitcoin is a decentralized digital currency, which means it is not regulated by any single government or central bank in the same way that traditional currencies are. U.S. government agencies treat Bitcoin as both a digital commodity and a virtual currency.

Like many businesses, Bitcoin miners rely on electricity to power their operations. Currently, Riot is a large flexible load on the Texas Grid operated by ERCOT. The company has long-term power purchase agreements, which allow it to mine Bitcoin, or to sell energy back to the market. Riot also participates in ERCOT demand response programs to help stabilize the grid during times of high demand.

Riot’s operations do not require freshwater. Riot’s Rockdale facility is primarily air-cooled and utilizes minimal amounts of water. Water used for operations at the Rockdale facility is not municipal water, it is sourced from an adjacent lake. The immersion cooling systems that are utilized require minimal amounts of water compared to typical data centers or other major industries. For context, agriculture uses 70% of the world’s water, and U.S. golf courses alone use double the water of the entire world’s Bitcoin mining footprint.

The Rockdale facility is located adjacent to the former Aloca plant, not near residential areas. Sound coming from the facility is similar to that of an air conditioner and should not impact the lives of nearby residents.

Bitcoin miners like Riot shut off operations during peak demand, and do not add strain to the grid when energy is needed most. Riot, like hundreds of other companies, participates in demand response programs which help improve grid reliability. Bitcoin miners like Riot generally have lower opportunity costs and drive down the price of ancillary services for rate payers.

The mission of Bitcoin is to empower individuals to be their own bank and have easy access to money that can’t be inflated away. Bitcoin offers an alternative to dollar debasement, which is caused by money printing and reckless spending in Congress. Bitcoin also stands in opposition to CBDCs — a form of digital currency that would allow governments to surveil spending and even control bank accounts. Much of the opposition to Bitcoin mining in Texas is supported by pro-CBDC organizations and politicians.