Author: Natalie Walters. Texas has made itself the most welcoming state for crypto and blockchain companies with a statewide lobbying council and very friendly rates for crypto miners.
Mance Harmon graduated from college in 1993 when the World Wide Web was just getting ripples, so he remembers the frustrations of trying to explain it to his parents. It didn’t make sense to them until they got an email account, but now, everyone intuitively understands the Internet, he said.
“Crypto is in the same space,” said Harmon, now the co-founder of Dallas-Fort Worth’s largest blockchain company, Hedera. “As the number of applications grows and people start taking control of their identity and privacy, they’ll begin to appreciate it in a different light.”
D-FW has made its name as a business-friendly area with a large talent pool. But is the traditional environment enough to draw in the younger crypto companies that favor a more casual work environment, open minds and creative solutions?
“Crypto culture is one of the weirdest cultures I’ve ever been a part of,” said Rasikh Morani, CEO of The Arcadia Group, a Dallas-based blockchain software development company. It’s awesome. But it’s also very weird,” he said. “There’s no other industry where I’d be sending anime pictures to my clients or my clients’ investors.”
Crypto’s complexity means some tune it out, not wanting to get involved in something they don’t understand. That has allowed some of D-FW’s biggest crypto-related claims to fame to go largely unnoticed:Hudson Jameson, one of the best-known faces of Ethereum, hails from Dallas. For five years until 2021, he worked at the Ethereum Foundation. Coinsource, the world’s largest Bitcoin ATM operator, operates out of Fort Worth. In 2021, Dallas crypto startup Zabo secured a deal to be bought by leading U.S. mainstream cryptocurrency exchange Coinbase. If you ask industry experts whether Dallas-Fort Worth is becoming the “it” place for crypto, you rarely get a simple yes or no answer. But you hear the same themes.
How Dallas stacks up
The first point everyone agrees on is that there is no one “it” place for crypto because it was specifically designed to be done from anywhere.
“The unfortunate reality is that many, if not most, crypto companies are based offshore and maybe have an office in the States, due to the regulatory uncertainty,” said Mark Cuban.
In 2021, the entrepreneur’s Dallas Mavericks team started accepting Dogecoin cryptocurrency as payment for tickets and merchandise and signed a five-year partnership with publicly traded cryptocurrency platform Voyager.
Second, they agree that Texas is definitely the it place if you just focus on crypto mining, because the state is willing to negotiate “fantastic” rates for the power-heavy activity.
“Being in Dallas has been a big selling point for investors because they know that it’s becoming the mining epicenter of the U.S.,” said Nevin Bannister, co-founder and CEO of Dallas crypto mining startup Blockmetrix, which started in July and has already raised $50 million.Data from the state’s grid operator, the Electric Reliability Council of Texas, or ERCOT, affirms its growing mining presence. The U.S. has about 3,500 megawatts of Bitcoin mining capacity, and more than 40% of that is with ERCOT, according to estimations from Lee Bratcher, president of the Texas Blockchain Council.
Third, Dallas is generally a bigger place for companies focused on blockchain enterprise. These are companies that are using blockchain, the technology cryptocurrencies are built on, to create software and applications for companies. On the other hand, Austin is the epicenter for developers focused on crypto.
“Dallas is likely where a lot of the money will come from in the space with the hedge funds, private equity and family offices,” said Patrick Zielbauer, who is based in Austin and handles global strategic accounts for Chicago-based BlockFills, a company that connects investors to crypto companies. Zielbauer said he thinks BlockFills will continue to add employees in Texas.
Fourth, Texas is an it place on the regulatory side with companies across the board lauding the Texas Blockchain Council for setting the gold standard on how to influence state policy.
“Texas has become the epicenter for crypto in terms of leadership, especially on the regulatory side,” Harmon said. “When we started TBC, we had this vision that if we could influence the regulatory environment in Texas, the rest of the nation would follow. And that strategy is on track. A lot of people have their eyes on Texas because of the work that TBC has been doing.”
The nonprofit lobbying group with an office in Richardson launched at the end of 2020 and already has more than 90 corporate members and over 450 individual members, with about one-third of its total members in the Dallas-Fort Worth area, TBC president Bratcher said.
Access full article from The Dallas Morning News here.