- The state’s meteoric rise was propelled by affordable energy prices and a welcoming regulatory environment.
- It further gained momentum after China’s crackdown on crypto mining activities in 2021.
Texas has solidified its position as a dominant force in the world of Bitcoin [BTC] mining, accounting for more than 28% of all Bitcoin hash rate in the United States, according to recent data from crypto mining service provider Foundry USA.
The state’s meteoric rise as a crypto mining hub is attributed to favorable factors such as affordable energy prices and a welcoming regulatory environment.
In Foundry’s updated Hashrate Map, Texas emerged as the undisputed leader in Bitcoin hash rate. The state boasts 28.5% of the country’s total rate accounted for. This places Texas far ahead of its closest competitors, with Georgia claiming 9.64% of the hash rate.
New York claims 8.75%, and New Hampshire contributes 5.33% of the total. Bitcoin’s hash rate signifies the speed at which mining machines work to calculate valid block hashes.
Hash rate map in July 2023. Source: Foundry USA
A glimpse back to December 2021 offers a stark contrast with Texas holding a mere 8.43% of the nation’s hash rate. Meanwhile, Georgia dominated with 34.17%. Kentucky and New York claimed 12.40% and 9.53%, respectively.
The shift in mining dynamics demonstrates the growing participation of U.S. states in Bitcoin mining throughout 2023.
By July 2023, Bitcoin’s global hash rate surged to a remarkable 400 exahashes per second (EH/s). This was nearly double its level at the close of 2021, which stood at 174 EH/s, as reported by Foundry.
However, it’s worth noting that the data collected between 21 and 27 July 2023, coincided with power curtailments in Texas. During these periods, Bitcoin miners reduced their production to align with the grid’s energy supply and demand.
This practice is essential for maintaining a stable energy grid, especially during peak consumption times. Large energy consumers like Bitcoin miners receive incentives for their flexibility in energy usage.
Texas: The Lone Star of Bitcoin mining
One prominent player in Texas’ curtailment program is Riot Platforms, a Bitcoin miner that experienced a reduction in mining output from July to August. However, the company received more than $31 million in power credits from the state during this period.
The Lone Star State has steadily emerged as a hub for cryptocurrency mining, thanks to its cost-effective energy resources and supportive regulatory framework. Data from the Energy Information Administration reveals that Texas boasts electricity prices below the national average.
As of January 2023, the average residential electricity tariff in Texas stood at a competitive $0.14 per kilowatt-hour (kWh), offering an 8.3% discount compared to the national average of $0.15 per kWh. For large consumers like crypto miners, the cost advantages are even more pronounced.
Texas’ ascent as a cryptocurrency mining powerhouse gained momentum after China’s crackdown on crypto mining activities in 2021. With a combination of abundant and affordable energy resources, a favorable regulatory landscape, and competitive electricity rates, Texas is poised to maintain its leadership position in the Bitcoin mining arena.
