As corporations migrate to the business-friendly state, Texas and bitcoin mining may soon become synonymous. Can the ERCOT grid, however, withstand the high energy demand?
We had no idea what to anticipate when we arrived at one of North America’s largest Bitcoin mining operations. “This structure is 1,050 feet long and 60 feet broad,” said Chad Harris, CEO of Riot Whinstone. “This isn’t something you see in Bitcoin mining.”
Crypto miners rush to Texas
Riot Whinstone, located in Rockdale, Texas, about an hour northeast of Austin, is an extremely big mining complex. According to Harris, construction began in January 2020 and mining began in June of the same year.
Thousands of computers swarm like worker bees inside each football-field-length warehouse, mining practically constantly for a sweet profit – Bitcoin.
Bitcoin is a type of cryptocurrency, which is a type of digital money that is commonly referred to as a coin. Bitcoin is the first cryptocurrency, and it is now the most valuable. One bitcoin was worth more than $60,000 in April 2021, however, the price varies a lot. It requires a lot of energy to make more coins or to mine them.
“If I sent you $20 in bitcoin, it would use about the same amount of electricity that an American household would consume in a month,” said William Magnuson, a cryptocurrency law specialist, author of Blockchain Democracy, and Texas A&M professor.
Magnuson is concerned that bitcoin mining’s high energy consumption may result in increased carbon emissions. So, why does crypto-mining necessitate such a high level of computing power?
“It’s estimated that there are roughly 100,000 machines here,” Harris stated. Every computer or miner, according to Harris, is working 24 hours a day to solve a complex arithmetic problem. The first computer to solve it creates a new, one-of-a-kind bitcoin.
“So, after electricity costs, one single machine earns $30 to $31 per day,” Harris explained. These machines, according to Harris, produce around 63 bitcoins every day when they work together.
This equates to more than $3 million in total. The data centre will require 300 megawatts of power to accomplish this. The difficulty is that as each coin is produced, it becomes more difficult to answer that difficult arithmetic problem, leading to a demand for even more power.
Riot Whinstone is growing to meet that demand, adding enough computers to necessitate an additional 400 megawatts of power. This is sufficient to power a major metropolis.
“Texas has among of the world’s lowest energy costs,” said Lee Bratcher, president of the Texas Blockchain Council. ” Cryptocurrency miners and related businesses are flocking to Texas because of the low energy costs and business-friendly incentives.
“We believe that the ethos of Bitcoin, cryptocurrency, and blockchain, in general, aligns very well with Texas’ decentralized love, freedom-loving, and out-of-the-box, independent thinking,” Bratcher added.
With the goal of making Texas “Bitcoin mining country” and Austin the “Bitcoin mining capital of the world,” Bratcher founded the Texas Blockchain Council in 2020. “We have roughly 75 corporate members and about 250 individual members,” Bratcher added. The council hosts meetings for the bitcoin community in Austin, Houston, and Dallas on a regular basis.
In 2021, Blockcap, a mining and blockchain firm, relocated its headquarters from Las Vegas to Austin. Austin is home to more than quarter-dozen blockchain startups. Blockchain systems are basically digital ledgers. It’s mostly used to keep track of Bitcoin activity and transactions.
Bitdeer, another prominent Bitcoin miner on the continent who uses roughly the same amount of electricity as Riot Whinstone, is less than a mile away. According to a statement from Genesis Digital Assets, the company is establishing a new self-hosted Bitcoin mining data center in West Texas with 300 megawatts of capacity and power obtained by the Electric Reliability Council of Texas (ERCOT).
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