Texas Suffers from Too Much Bitcoin Mining: Costing Citizens Millions
• Texas declared itself open for bitcoin mining a few years ago, and companies have requested to put 33,000 megawatts of electricity into the ERCOT interconnection queue.
• A single bitcoin transaction used 1,452 kWh of electricity—equal to an average U.S. household for almost 50 days—and certain companies have been paid to shut down during heavy storms.
• Energy economist Ed Hirs believes these practices will ultimately fall on the shoulders of everyday citizens.
Texas Open for Bitcoin Mining
Texas declared itself open for bitcoin mining about two years ago when China said the practice would be illegal within its borders. The Lone Star State seemed like a good area given it had vast open land and cheap electricity, so many miners set up shop in Texas.
ERCOT Report on Mining
The Electric Reliability Council of Texas (ERCOT) has recently released a report stating that prospective crypto mining businesses have requested approximately 33,000 more megawatts in the ERCOT interconnection queue over the next few years—enough to power the whole state of Florida. Additionally, they noted that a single bitcoin transaction uses 1,452 kilowatt-hours (kWh) of electricity—equal to an average U.S. household for nearly 50 days.
Mining Companies Making Money
It was reported that Texas paid a specific bitcoin mining company to shut down its systems during a time of heavy winter storms and they made millions from doing nothing over several weeks. ERCOT says it does not discriminate against these types of companies but wants to serve any business looking to do business in Texas, including crypto miners.
Negative Impact On Citizens
University of Houston energy economist Ed Hirs believes that many excessive electricity practices seen in the mining industry in Texas are going to fall onto the shoulders of everyday citizens who will end up paying more or losing power due to these activities.
Overall, it is important to consider how increased cryptocurrency mining can impact citizens and resources as more companies look towards this type of activity regardless if it is based in Texas or another part of the world.