Virginia Beach Development Authority donates $500,000 to Bitcoin mining data center

After reducing property and equipment taxes for data centers, the Virginia Beach Development Authority has taken another step to boost the industry by awarding a $500,000 grant to a $65 million commercial data center facility from bitcoin miner BCause LLC.

This data center is used to process transactions at high speeds and has produced the bitcoins that have become mainstream and have rapidly increased in value over the past few months.

The Virginia Beach Development Authority said the data center, once operational, will house thousands of private GPUs and will lease the machines to individual customers.

The company has pledged to create 100 full-time jobs with an average salary of $60,000 per year. The bitcoin mining hardware is deployed in a converted warehouse and is expected to begin operations in the coming days.

Bitcoin is the world's most valuable cryptocurrency, but much of that growth has been driven by speculative trading because there are still few ways to use it.

Bitcoin relies on blockchain technology, an open-source framework that allows users to embed contracts into secure and transparent digital code that helps process transactions without the need for a trusted middleman.

Despite its limited number of applications, lack of legal tender recognition, and unstable value, its highest price reached $17,549 on December 11, 2017. But its founder Tom Flake believes that this is an economically meaningful way, and this data center facility will provide the necessary infrastructure to produce Bitcoin.

“These computers are very powerful, but they generate a lot of heat and they consume a lot of power and they require a lot of maintenance,” he said. “We still allow some consumers and retail customers to participate, still allow them to earn bitcoin or bitcoin cash, but we do it in a way that these people don’t have to be IT experts, mechanical engineers or structural engineers.”

For the Virginia Beach Development Authority, it sees investment as a reason to attract data centers to the area. Its economic development director Warren Harris said: "We are ready to become a hub for data centers, and reducing taxes puts us in a very competitive position."