Texas might seem like an unlikely mecca for large scale bitcoin mining operations. Although energy prices in Texas are relatively cheap — a big draw for miners — the state’s reserve margins are almost nonexistent, as was demonstrated by a recent ice storm that left some homes and businesses without power for up to four days.
And when it comes to the cryptocurrency mining community, It’s hard to know exactly who’s located where and what exactly they’re mining. But there’s lots of anecdotal evidence that a significant bitcoin industry move to Texas is afoot. Bitcoin mining companies like Bitmain, Blockcap, Argo Blockchain, Great American Mining, Layer1, Compute North, Riot Blockchain and Whinstone are just a few of the major industry players that have chosen to set up shop in the Lone Star State.The Bitcoin Mining Energy Dynamic In Texas
Compared to many U.S. states, Texas energy rates are inexpensive, although there are a few states that are slightly cheaper.
This is still a strong selling point for bitcoin miners, but energy supply problems, with no end in sight as the population of Texas grows, is a potential problem.
Meredith Angwin, author of “Shorting The Grid” told Great American Mining’s Marty Bent in a recent “GAMcast” interview that Texas has “the skinniest of reserve margins” when it comes to energy supply, as borne out in the recent ice storm.
Angwin also noted that renewables like wind and solar are only available when it’s sunny or windy and have to be backed up by natural gas.
But it’s the nature of bitcoin mining that miners “seek out extremely cheap sources of energy which tend to be stranded renewables or fossil fuels like natural gas and oil via flaring or venting that would otherwise be wasted,” said Bent in a recent podcast.
Despite the challenges Angwin noted, Argo Blockchain is setting up in West Texas, using renewables (mostly wind) and natural gas as backup.
“We chose West Texas an...