TMGcore, an industrial-scale cryptocurrency mining company in Texas, has added Sun Microsystems co-founder Scott McNealy as an adviser.

McNealy will provide counsel to TMGcore’s CEO, JD Enright, the company said this week in a news release. The news marks an endorsement of TMGcore’s business model by a well-known technology veteran.

TMGcore is developing one of the most energy-efficient mining rigs, utilizing cutting-edge technology and innovative mining boards to dramatically decrease cooling costs and increase token outputs,” McNealy said in the news release.

TMGcore is mining cryptocurrencies in two facilities, one in Houston, the other in Plano, about 20 miles north of downtown Dallas. Combined, they’re mining 20 to 30 coins a day, CEO Enright tells ThirtyK.

Why Texas?

Texas might seem like an odd choice for a large-scale mining operation because of its broiling temperatures. (Friday’s high is expected to be 95 degrees Fahrenheit.) The powerful computers used to mine new digital coins generate lots of heat so keeping them cool is a serious, and potentially costly, business consideration. That’s why cooler places with bountiful electricity, such as Quebec, have drawn lots of interest from miners.

But TMGcore says the operation will avoid sky-high air conditioning bills by using something known as immersion cooling, in which mining devices are submerged in 3M’s Novec fluid, a non-conductive liquid that absorbs heat.

The company has developed self-contained mining units it calls HydroPod Skids, each of which has an area of 570 square feet and holds 1 megawatt of mining devices, COO Taylor Monnig tells ThirtyK.

On each skid, the mining devices are submerged in Novec fluid. As the fluid absorbs heat, it evaporates and rises into water-chilled coiling coils. Then, as it cools and condenses, it naturally flows back to the bottom of the tank. Monnig says this process avoids the expense of having to mechanically pump fluid away from the devices into a cooling tank and then back into the main tank.

The first skid will arrive at the Plano facility on July 23, according to Monnig. Up until now, TMGcore has been using more traditional air-cooled mining devices.

We chose to launch in Texas for two main reasons,” Enright says. “Access to cheap and stable power was the first. The second was the building. Our Legacy1 facility is a tier-three data center with a roof that is capable of withstanding 100-plus mile-per-hour winds.” Located in Plano, the Legacy1 facility is capable of a 100 megawatt live power load.

Maximum Efficiency

The skids are not the only way TMGcore says it is maximizing efficiency. Its system is continuously assessing which coins are most profitable to mine at any given time by factoring in the market price of the coin, the difficulty of access and the hashrate.

TMGcore mines only coins that use the SHA-256 algorithm. They include bitcoin (BTC), peercoin (PPC), Deutsche eMark (DEM) and bitcoin cash (BCH) but not coins such as ether (ETH) or bitcoin scrypt (BTCS).

The company’s chip suppliers have developed custom application-specific integrated circuit boards that are 50 percent more dense than traditional mining devices and are more energy efficient.

TMGcore says it has already secured significant financing, including $67 million from real estate investment firm Pinchal & Company and $10 million from private equity investors. It also plans to conduct an initial coin offering of a security token to accredited investors late this year. Each token will cost $50,000, and TMGcore plans to sell 1,000 of them.

Ross Snel contributed to this report.
Dan Butcher
Dan Butcher is a New York-based financial writer and editor who has worked at the FT's Ignites and FundFire, SourceMedia's Financial Planning, Crain's InvestmentNews and eFinancialCareers. He got his B.A. at the University of Colorado at Boulder and his M.A. at New York University.