As businesses prepare for a heat wave that is anticipated to strain the electricity grid, nearly all industrial-scale Bitcoin miners in Texas have turned off their equipments.
Due to Texas’s affordable energy prices and lax regulations on cryptocurrency mining, miners like Riot Blockchain Inc., Argo Blockchain Plc, and Core Scientific Inc., have flocked there. By computational power, the state has emerged as one of the world’s major centers for cryptocurrency mining.
Power load reaching boiling point
Lee Bratcher, President of the Texas Blockchain Association told Bloomberg,
“There are over 1,000 megawatts worth of Bitcoin mining load that responded to ERCOTs conservation request by turning off their machines to conserve energy for the grid. This represents nearly all industrial scale Bitcoin mining load in Texas and allows for over 1% of total grid capacity to be pushed back onto the grid for retail and commercial use.”
Texans and huge electrical users were asked to reduce their electricity use on Monday from 19:00 to 01:00 UTC by ERCOT on Sunday. The total power demand was predicted to exceed 79,000 megawatts, breaking the previous record of 78,206 megawatts established last Friday. In fact, Austin hit 107 degrees on the scale, at the time of writing.
In anticipation of the demand that Texas’s electrical grid would not be able to meet, many cryptocurrency miners in the Lone Star state have announced they have already reduced or stopped their operations. For example, Core Scientific announced on Twitter on Monday that it temporarily turned off all of its ASIC servers in Texas “to bring relief to people in Texas.”
During the winter of 2021, when frigid conditions nearly caused the entire grid to shut down, numerous areas of the state were without power for days. Since then, mining companies operating in Texas have encountered similar difficulties.
As a result of the heat wave keeping their equipments off, which drives up energy prices and puts additional strain on the state’s power grid, miners have experienced a decline in profitability. The dramatic decrease in Bitcoin’s value has already made it difficult for the miners to pay off debt and raise new funds. The value of publicly traded miners’ shares has fallen by roughly 75% this year.
The United States is still in the lead
After China banned cryptocurrency mining in 2021, the United States overtook China as the world’s leading mining hub. Large mining businesses are increasingly drawn to Texas in particular because of its low energy costs and welcoming regulatory approach to cryptocurrencies.
In fact, Argo Blockchain disclosed intentions to invest up to $2 billion in building a Texas mining plant last November.