• Texas declared itself open for bitcoin mining two years ago, and since then a large influx of companies have requested to build up to 33,000 megawatts in the ERCOT interconnection queue.
• A single bitcoin transaction uses enough power to power an average US household for 50 days.
• The massive energy consumption has allowed some companies to make money off of market leverages and even be paid for shutting down operations during winter storms.
Texas Opens Up To Bitcoin Mining
Two years ago, Texas declared itself open for bitcoin mining. This was due to China declaring it illegal within its borders, forcing miners to relocate elsewhere. The Lone Star State was chosen due to its vast open land and cheap electricity.
The Electric Reliability Council of Texas (ERCOT) has released a report stating that prospective crypto mining businesses have requested to put approximately 33,000 more megawatts in the ERCOT interconnection queue over the next few years – enough power to light up the entire state of Florida. Furthermore, each 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.
Making Money Off Leverages
Due to their massive energy consumption combined with their ability to shut off almost instantly, some companies are able to save money and make money by deftly pulling the levers of U.S. power markets. Most years they are rarely asked to shut down and when they are they are paid even more – as seen when Texas paid one such company millions of dollars just recently during heavy winter storms when asked them not operate their systems during this time frame.
Despite these practices ERCOT states that it is not discriminating against those wanting set up shop in Texas nor does it have any problems with firms offering specific services – making clear that all businesses can do business there including crypto miners..
Consequences For Citizens?
Ed Hirs – a University of Houston energy economist – believes that a lot of these excessive electricity practices seen in the mining industry in Texas will fall onto everyday citizens shoulders with them having pay higher prices or losing out on power altogether if this isn’t addressed soon enough