Despite concerns about the industry's heavy energy use, Texas has become a Bitcoin mining hotspot. According to Lee Bratcher, head of the Texas Blockchain Council, Bitcoin miners in Texas consume approximately 2,100 megawatts of the state's power supplies.
A Reuters report highlights that this represents a 75% rise in electricity usage over the previous year and nearly triple that of the previous year.
Despite these data, several Texas counties have granted tax breaks to miners, and the state's wind and solar energy supplies have drawn more bitcoin miners.
The Threats of Bitcoin Mining to the Texas Grid
The growth of Bitcoin mining has not gone unnoticed in Texas. Last year, the state faced a severe winter storm that caused power outages and the deaths of over 250 people.
Riot, a company with a 750-megawatt capacity Bitcoin mining facility in Rockdale, Texas, is one of the world's largest crypto-mining sites in terms of computing power.
According to a Bloomberg piece, Riot reported 17,040 of its 82,656 Bitcoin mining machines were offline due to damage to the facility caused by heavy winter storms in late December 2022.
The prospect of increased crypto demand has alarmed some experts, who warn that if all of Texas' Bitcoin mining links to the system, it could cause a problem with the grid.
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Matt Prusak, chief commercial officer at cryptocurrency miner US Bitcoin Corp, tells Reuters that Bitcoin mining is a very energy-intensive business, which is why places like West Texas granting tax incentives tend to be full of Bitcoin miners.
He noted that the McCamey site, which has one of US Bitcoin Corp's mining operations, consumed 173,000 megawatt hours of power in February - 60% of the power provided by the grid and nearly 40% from the nearby wind farm.
To put this in context, the average American home consumes approximately 10 MWh of power each year, according to the Energy Information Administration.
Imminent Restrictions
According to Reuters, bitcoin mining faces new federal regulations, including a proposed 30% tax on electricity usage for digital mining, and calls for a regulatory framework from the US Treasury Secretary and commodities regulator.
Bitcoin mining that uses fossil fuel-generated power is already prohibited in New York, and other states are expected to follow suit.
Despite this fact, the bitcoin mining sector in Texas is still expanding. The Texas Blockchain Council expects the business to continue booming as Bitcoin and other cryptocurrencies become more mainstream.
Bitcoin? Mining? Crypto?
Cryptocurrencies such as bitcoin are not held in a physical central bank but rely on a decentralized global network of powerful computers to keep their value afloat.
These "miners" aim to build and establish a decentralized payment system that fundamentally alters how we buy and sell everything - then get paid with crypto.
Cryptocurrencies have seen rapid expansion in recent years, but they have also had a huge impact on climate change due to the enormous amount of electricity that computers need to run mining.
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