Texas Bitcoin miners, embroiled in a controversy over their energy-intensive operations, are shutting down most of their machines while the state grapples with its power crisis.
The Lone Star state is one of the top destinations for Bitcoin miners thanks to its traditionally low-cost energy and friendly regulations. Large-scale mining companies such as Riot Platforms and Marathon Digital have major facilities across Texas.
The industry has been in the vertex of a controversy since Texas started having some of the worst power crises due to extreme weather in recent years. The Biden administration declared a power emergency in Texas on Thursday amid a brutal heat wave.
"We have consistently been seeing 90% plus curtailment of Bitcoin mining each day this week that power conditions tightened," said Lee Bratcher, president of the Texas Blockchain Council. "The power that is not off is most power to the office buildings and backup systems that are on-site and not the machines themselves."
Bitcoin mining is an energy-intensive process in which miners use specialized computers to validate records of transactions on the blockchain and earn rewards in the form of the token.
All the industrial scale Bitcoin miners shut down their machines during the power emergency, Bratcher said.
Those Bitcoin miners also halted operations last summer when another heat wave induced high power demand for the state. The disruption can be a head wind for the miners that are already battered by low Bitcoin prices, inflated electricity prices, increasing competition among the mining companies and a nearing Bitcoin blockchain code update that will drastically reduce mining revenue in 2024.
Some miners have been able to mitigate the curtailment's impact by locking in low prices with long-term power contracts or participating in demand and response programs offered by the Electric Reliability Council of Texas. Riot made a record $31.7 million in power credit in August after selling pre-purchased electricity back to the grid.
WASHINGTON POST