Bitcoin mining and sustainable energy
Texas is becoming the global hub of Bitcoin mining, here’s why
The state is doing a great job in attracting Bitcoin miners
The Lone Star State has seen the arrival of many miners in the last few months. Whether large or small, mining enterprises are all looking to settle down within its territory. But why? Let’s dive deeper into the reasons behind the increasing popularity of Texas among Bitcoin miners.
The numbers of Bitcoin mining in Texas
There’s no denying that the United States did the best job attracting the majority of the miners who saw themselves forced to leave China. And within the country, Texas came up as the most popular destination.
The Lone Star State is becoming the global capital of Bitcoin and cryptocurrency mining, not only of North America but also worldwide.
According to Peter Wall, CEO of Argo Blockchain, the state is home to six of the world’s largest mining enterprises and over twenty small-scale mining operations.
That said, Texas accounts for ~14% of the entire Bitcoin network’s hashrate, pushing the country to the first place in the ranking of nations with the most miners worldwide.
In terms of electricity, Bitcoin mining in the state consumes about ~1GW. Wall expects that this number will rise to 5GW by 2025.
Why are miners choosing Texas?
It’s not a coincidence that the most renowned Bitcoin mining organizations are all choosing Texas. The state offers miners more benefits and advantages than any other location in the world.
Let’s analyze them in-depth.
Low-cost, accessible, and clean electricity
Energy is miners’ most relevant expenditure. In many cases, its price can even define whether mining is profitable or not. That is why cheap electricity is always a priority for mining operations.
Texas offers one of the lowest electricity rates in the United States. According to the latest U.S. Energy Information Administration (EIA) data, the cost of power for industrial purposes is 5.20 cents per KW/h. That is ~31% below the national average of 7.53 cents.
Additionally, the state promotes the use and development of clean energy from renewable sources, which is a central issue for many mining companies. EIA data shows that 15,84% of Texas electricity generation comes from renewable sources.
It’s also worth mentioning that the primary source of energy in Texas is natural gas, which provides a mutual benefit opportunity between energy producers and Bitcoin miners. Learn more about it in the article below.
Texas’ power grid: How can Bitcoin improve it?
Texas’ energy market is unique in many ways. Firstly, it’s deregulated, enabling energy producers to compete against each other and pushing them to offer better prices and benefits to users.
Secondly, the power grid is isolated from the rest of the country. That means that all the energy produced within the state has to be also consumed within the state.
In this scenario, a challenge arises. With power grids — and most importantly, those that rely on renewable sources — , the generation must match the consumption. Otherwise, blackouts happen.
Bitcoin mining provides a steady demand for electricity that enables energy producers to scale and amplify their output without overloading the grid.
We won’t expand on this topic here, but if you’re interested in how Bitcoin mining can improve the reliability and balance of power grids, you can read more about it in our dedicated article below.
Friendly government approach
A crucial factor to consider when choosing where to set up a mining operation is the legal framework and overall stance of the government of a particular location. Hostile government regulations towards crypto and crypto mining were the reason why miners had to leave China in the first place.
The governor of Texas, Greg Abbot, is a Bitcoin mining advocate and very welcoming of miners. He even referred to the state as “Bitcoin Country.”
Moreover, besides being very vocal and constantly showing his support and intentions to make Texas “the number-one state for Bitcoin,” Abbot has signed several bills establishing a legal framework and recognizing cryptocurrencies under commercial law.
Friendly government regulations facilitate the work of mining organizations, provide peace of mind by establishing legal clarity, and often save miners time and money by avoiding bureaucratic procedures.
What do you think?
Texas sees the long-term potential of Bitcoin mining and cryptocurrency in general.
From rebalancing its power grid to the substantial inflow of capital that the crypto mining industry represents, the Lone Star State is committed to attracting miners from all around the world. And so far, it’s paying off.
What do you think? Is Texas making the right move by becoming more crypto-friendly?
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