Texas has turned into a mecca for Bitcoin and other cryptocurrency miners over the past year. But why is Texas the primary beneficiary of the “great mining migration?” And how is it holding up during this week’s big storm?
So far – so good CNBC reported:
As a major storm hits TX, #bitcoin miners across the state are shutting off to help the grid brace for impact.
Working so far. #ERCOT says "there's enough power for current demand" at 9,084 MW. https://t.co/AzwHanjCFy @fgthiel @chadeverett @JasonLes_ @lee_bratcher @arvanaghi
— MacKenzie Sigalos (@KenzieSigalos) February 3, 2022
Energy rates have been a significant factor in the Lone Star State’s crypto boom. Texas’s energy rates are currently ranked as the seventh-lowest in the nation, with the annual average price per kilowatt-hour of $8.36, ahead of North Dakota’s $8.53 cents and behind Nevada’s $8.33.
In addition to being the largest energy producer in the country, Texas has deregulated the power grid, facilitating a more competitive environment for utilities and their customers, according to Ali Rehman, a blockchain investor and the co-founder of FindTheVenue.
Everything is bigger in Texas.
Including #Bitcoin mining. pic.twitter.com/vW9YJolXxN— Dennis Porter (@Dennis_Porter_) January 29, 2022
“Given that the power grid in Texas is deregulated, electricity providers are incentivized to provide low rates, which means customers can choose between different power providers,” Rehman told The Epoch Times. “Cryptocurrency mining facilities can set up long-term contracts with power providers, which means they can purchase electricity at a fixed price for many years.”
Public policy has further served as an integral component of strengthening industry confidence.
In 2021, Texas Gov. Greg Abbott met with dozens of cryptocurrency leaders to discuss a proposal that might have seemed to be counterintuitive on the surface.
Miners could support the state’s power grid by demanding immense levels of electricity, forcing private companies to begin constructing additional power plants. Should the grid start sputtering in the event of a major storm, as it did during Winter Storm Uri in February 2021, miners could suspend operations to conserve energy for residential properties and businesses.
Despite most of the state’s energy needs being satisfied by natural gas, about one-fifth of Texas’s energy also emanates from wind power, “making cryptocurrency mining a relatively green exercise, unlike other parts of the world—such as Communist China—that use coal,” Rehman said.
China, which had controlled up to two-thirds of global Bitcoin mining, banned all domestic crypto mining and trading in June 2021. This was in addition to restricting financial institutions from participating in crypto transactions, declaring all digital token transactions as illegal.
Kalyan Banerjee, the co-founder of Lumenci, told The Epoch Times, “There is enough power deregulation and the energy is cheap. So come here, come one, and come all.”
CNBC reported on the topic this past summer:
Kari is an ex-Community Organizer who writes about Cultural Marxism, grassroots activism, music, IndyCar racing and political campaigns. @Saorsa1776
