Recent crackdowns on crypto mining in China have raised concerns over the potential impact of hashrate migration on Texas’ unreliable electricity market, as a growing number of displaced miners keep an eye on the Lone Star State.
Texas’ abundant sources of renewable energy and highly controlled power grids make the state an obvious choice for miners migrating from China and elsewhere, with 20% of Texan electricity being generated by wind as of 2019.
talking to CNBCBrandon Aravanaghi, a former security engineer at crypto exchange Gemini, predicted that Texas will see “a dramatic turnaround in the next few months” as miners seek to set up shop.
“We have governors like Greg Abbott in Texas who are promoting mining. This is going to be a real industry in the United States, which is going to be incredible,” he said:
“Texas not only has the cheapest electricity in America, but it also has the cheapest electricity in the world.”
Nick Carter, founding partner at Castle Island Ventures, told CNBC that half of the world’s hashing power may eventually run out of China’s borders and will need new homes, adding:
“Every Western mining host I know has their phones off the hook. Chinese miners or miners who were domiciled in China are looking to Central Asia, Eastern Europe, the Americas, and Northern Europe.
But is the Texan power grid up to the challenge of providing electricity for an influx of more crypto miners? The Electric Reliability Council of Texas (ERCOT) recently requested That Texas recently curbed its electricity use amid a heatwave, with many residents turning on their air conditioners earlier this week.
Roughly 12,000 megawatts of generation capacity was offline as of Monday – enough to power 2.5 million homes. The ERCOT described the scale of the forced outage as “very worrying”.
The regulator warned that failure to heed the request could result in a repeat of widespread winter power failures, which left 69% of Texans without electricity, and nearly half without water in February. According to Buzzfeed, the February outage could result in 700 deaths in the state
Angela Walch, Texas research associate at University College London’s Center for Blockchain Technologies, tweeted her concerns about the share of Texas’ electricity for bitcoin mining, emphasizing that her family needs to “reduce our air-conditioning use.” machine and dryer, etc., not to run the washing machine. “
Obviously, bitcoin is not the only reason for this cluster*^% which has been caused by our poor political leadership in Texas.
But, I’m curious to know which grid it uses. Bitcoin miners may be the first to shut down in times of grid tension.
— Angela Walch (@angela_walch) 15 June 2021
However Tierion CEO Wayne Vaughn responded by saying that most of the electricity used to power Texan mining operations consists of trapped resources that “will never reach your home to power your equipment. “
Others argued that bulk bitcoin mining operations could actually alleviate Texas’ electricity issues, with a seasonal surge in Texas electricity demand encouraging miners to sell electricity to the state’s grid that would have otherwise gone unrecoverable. Huh.
In September 2020, Peter Thiel-backed crypto miner Layer1 in West Texas reported that it had made more profit than 700% By selling renewable electricity back to the grid amid rising heat demand.
While up-to-date data for the global hash rate distribution is not available, the University of Cambridge’s bitcoin electricity consumption index (BECI) estimates that China represents 65% of the world’s hashing power as of April 2020.
Earlier this month, district regulators in western Xinjiang and Yunnan issued notices Mandating the suspension of virtual currency mining enterprises. BECI estimates that both regions account for 40% of the country’s hash rate.