This ‘unbelievable’ factor could change Bitcoin mining in Texas
For months, the crypto sector has been tracking regulatory movements in both China and America as though following a match. However, it seems the eyes of crypto watchers are settling on the West. Why? According to the Cambridge Bitcoin Electricity Consumption Index, America’s share of the average monthly hashrate spiked from 4.06% in September 2019 to 35.40% in August 2021.
During an episode of The Pomp Podcast, investment expert Anthony Pompliano spoke to CoinMetrics co-founder Nic Carter about Bitcoin mining in America, Texas, and the burning question of renewable energy.
Renewable energy has a strong potential for growth in the Lone Star state. Carter said,
“The Texas grid, I think it’s around 80 gigawatts – Ercot – and you’re looking at, you know, maybe 20, 30 gigawatts of wind and solar [power], just in the next two years.”
Carter’s own “reasonably conservative” prediction was two to three gigawatts of energy dedicated to Bitcoin mining in Texas by the close of 2022. He said this might be roughly 5% of Texas’ energy grid.
Apart from pro-Bitcoin politicians, Carter stressed on the importance of Texas’ abundant renewable energy sources. These included a “wind corridor” from West Texas to Canada, extra natural gas, ample sunlight, and excess electricity which needed more buyers.
The exec also pointed out how nuclear energy suppliers were teaming up with Bitcoin miners for better monetization. In short, Carter simply described the amount of renewable energy in Texas as “unbelievable,”
He also claimed that Bitcoin miners would be well-suited to the region. This was because they could use the excess energy but also power down in seconds in case of scarcity or emergencies. Carter explained,
“There are formal programs on the Texas grid that miners are perfectly suitable for and other industrial centers of load are not, because virtually nothing else can turn itself off at short notice like that.”
About China FUD becoming America FUD, Carter was confident that Bitcoin mining would continue to grow in the USA. He reasoned that American states also had governance power and that costs of capital were cheap. He concluded,
“We punch above our weight when it comes to capital markets.”
Can crypto be regulated anymore?
Pompliano compared crypto innovation to jay-walking and wondered if regulators even had the necessary force to stop everyone. For his part, Carter acknowledged the size of the industry but pointed out that exchanges and DeFi protocol operators could be possible “chokepoints.”
Coming to regulators, Carter suggested,
“They will need more resources to do that and that might require Congress increasing their budget or something like that.”
Even so, he and Pompliano agreed that they saw banks eventually coming out to support Bitcoin.