Texas Overwhelmed by Bitcoin Mining: Who Pays the Price?
• The Electric Reliability Council of Texas (ERCOT) recently released a report stating that bitcoin mining businesses have requested to put approximately 33,000 more megawatts in the ERCOT interconnection queue over the next few years.
• A single bitcoin transaction uses nearly 1,452 kilowatt-hours (kWh) of electricity, equal to the power consumption of an average U.S. household for nearly 50 days.
• Texas paid a specific bitcoin mining company to shut down its systems during a time of heavy winter storms, resulting in millions of dollars made for doing nothing.
The Situation in Texas
Two years ago, when China declared bitcoin mining illegal within its borders, many miners had to find a new place to set up shop and Texas seemed like a good option due to its vast open land and cheap electricity. However, according to the new report by ERCOT, this could be having negative effects on the state as too many miners are requesting access to electricity. These companies require massive energy consumption and can turn off almost instantly which allows them to save money while making money through agreements with power markets. Although they rarely get asked to shut down completely, it was reported that one particular company was paid millions by Texas during times of heavy winter storms for shutting off their systems for weeks at a time.
ERCOT states that they don’t want to discriminate against crypto miners or businesses looking to offer services and that they want all types of business in Texas regardless if they are crypto related or not. Despite this fact, University of Houston energy economist Ed Hirs believes that these excessive electricity practices by mining companies will ultimately fall on everyday citizens rather than those involved with the industry themselves.
Bitcoin Mining Impact
The impact of Bitcoin mining on the state of Texas is still yet unknown but there is potential for it make negative effects on citizens as well as local businesses due ERCOT’s lenience towards miners who use large amounts of energy without consequence.
It is clear from this article that while ERCOT wants all types of business in the Lone Star State regardless if it’s cryptocurrency related or not; there could be potential issues arising from allowing too much Bitcoin mining given its high energy consumption rates and ability for companies involved in it make large profits off shutting down their systems during times where the demand for power increases significantly such as winter storms..