Key Takeaways:
- Texas is a popular destination for bitcoin miners due to its affordable energy prices and lax restrictions.
- In the midst of a heat wave, Texas is facing an energy crisis.
- Miners have been instructed to turn off their specialised set ups during the shortage
Over the weekend, Texas temperatures broke century-old records as a brutal heat wave scorched the Lone Star state in triple-digit heat. The government’s grid operator warned Monday that rolling blackouts were “likely” in the following days due to temperatures surpassing 110F in central Texas and asked consumers and businesses to reduce power usage.
In preparation for a heatwave, Texan authorities and bitcoin miners are working together to relieve the state’s energy grid. More than 1,000 megawatts of power that had been set aside for bitcoin mining are now being used for retail and commercial purposes.
Over the weekend, temperatures in Texas reached triple digits Fahrenheit, smashing records that date back more than a century. Waco hit 108F on Saturday, breaking the previous record of 104F recorded in 1917. As temperatures exceeded 110F in central Texas on Sunday, more than a dozen records for the highest temperatures were established around the state.
Bitcoin miners have heard the call after fleeing to Texas in 2021 following China’s industry ban.
Bloomberg writes that “virtually all industrial scale Bitcoin mining” operations in Texas have shut down as of Monday, according to Lee Bratcher, head of the Texas Blockchain Association. This has freed up 1,000 megawatts of electricity for the grid to redistribute. According to Bratcher, that is equivalent to 1% of the entire grid capacity of Texas.
Due to its relaxed rules and warmly friendly administration, Texas has emerged as one of the most popular mining locations in the United States. Senator Ted Cruz, who firmly believes in bitcoin and thinks cryptocurrencies stand for freedom, said he would like Texas to be the centre of cryptocurrency development.
While this is going on, New York, one of its only rival states by hash rate (a measurement of processing power), has put a two-year prohibition on carbon-based mining on the verge of taking effect.
Even though Governor Kathy Hochul has the last say, Bitcoin miner Kevin Zhang of Foundry said last month that he thinks the state’s laws are already scaring away miners.
During prior catastrophes, such as when a winter storm struck the state in February, Texan Bitcoin miners have shut down their operations. Power supply was made available for other life-giving services, like heating, by cutting back demand from energy-hungry Bitcoin mines.
At the time, Nathan Nichols, CEO of the mining company Rhodium, posted on Twitter, “We are delighted to help stabilise the grid and help our fellow Texans stay warm.”
Texas residents who consume a lot of energy have previously been asked to cut back. When six power plants went offline in May amid a heatwave, Ercot advised people and companies to use less electricity.
The Democratic candidate for governor, Beto O’Rourke, used Twitter to remind his followers about the deadly blackouts that occurred last winter and to accuse Abbott, a Republican, of being responsible for the current problem.
Greg Abbott, the governor of Texas, has adopted a different strategy—one that is maybe counter-intuitive. Abbott thinks that by encouraging the construction of more power generation facilities, bringing more miners to the Lone Star State might stabilise the system and end years of instability.
North American behemoths like Riot Blockchain, Argo Blockchain, and Core Scientific are among the state’s miners. Despite a successful 2021, most of these businesses were compelled to sell substantial sums of Bitcoin last month as a result of revenues dropping owing to the bear market.
This summer will be a test for power infrastructure all across the world as the climate issue causes extended heatwaves. Texas is a large producer of renewable energy sources like solar and wind, both of which are susceptible to weather changes.
