How Texas is Becoming a Bitcoin Mining Hub – Techdoxx

Deepak Gupta February 12, 2022
Updated 2022/02/12 at 6:29 AM

There are thousands pounds of bitcoin mining equipment still in transit from China to Texas, part of a multi-month caravan, as Texas Governor Greg Abbott does. courting the bitcoin industry a high point of his 2022 re-election campaign.

Texans are looking to capitalize on China’s missed opportunity as the chinese government forces bitcoin mining operations to relocate or go underground, ensuring Texas has an important role to play in the cryptocurrency industry.

“We launched our first bitcoin mine in downtown Fort Worth, which will be a key part of our larger mine located outside of the city.” Geosyn Mining Co-founder Caleb Ward described a new facility in Texas that opened in January 2022. “We are using the revenue from this 20,000-square-foot facility outside of Fort Worth to start significant solar construction.”

By the end of March, Ward expects to have around 530 bitcoin mining machines operating at his facility alone. And he’s not the only bitcoin miner with his eye on Texas. There is supposedly 27 local bitcoin mining companies accounted for by the Texas Blockchain Council. Abbott’s challenger in the upcoming election, Don Huffines, a Republican real estate developer and candidate for governor of Texas, said recently that he would look to opportunities beyond the mining industry and be even more pro-bitcoin than Abbott. Huffins he said he would do a bitcoin auction if he was elected.

In general, Texan politicians appear to be pro-bitcoin. Republican Senator Ted Cruz said in October 2021 that bitcoin mining could help “strengthen our energy infrastructure”. There are, however, critics in Congress who doubt that the bitcoin mining industry would benefit the power grid. The Chair of the House Energy and Commerce Committee, Rep. Frank Pallone, DN.J., pointed out in January that bitcoin’s proof-of-work mining process requires huge amounts of energy.

Texas will be the bitcoin capital of the world for the next two years. Poolin CEO Kevin Pan

“Last year, there were hundreds of thousands of transactions on this network. Imagine the climate implications”, Pallone he said.

The massive move of bitcoin mining facilities to Texas, currently underway, could offer a proving ground as to whether the mining industry is good or bad for the electrical grid. Proponents argue that bitcoin mining will help regulate energy demand across the grid. Critics say it will take more energy than it supplies and regulates. The stakes have never been higher. Last year, the Texas electrical grid experienced several failureswith deadly consequences. Some analysts blame privatization by the deplorable state of the electrical infrastructure. At the moment, it is still prohibitively expensive and difficult to send energy from production sites to consumers. Electricity is lost in translation, harming the grid.

Meanwhile, the march of entrepreneurs and equipment continues. Poolin CEO Kevin Pan, leading one of the top bitcoin mining companies in the world and representing about 13% of the global network hash ratetold Ploonge that his own company’s goal is to expand its new twogigawatt mining facility in Texas, more than quadrupling its Texas operations over time.

“Texas will be the bitcoin capital of the world for the next two years,” said Pan.

Pan and Ward said the best way to make Cruz’s vision happen, using bitcoin mining to strengthen the energy infrastructure in Texas, is to power bitcoin mining facilities using renewable energy sources such as solar and wind.

“We are building solar panels around our Texas site,” said Pan. “There are a lot of windmills around the coast as well.”

Wind energy is usually seasonalfloating from 7-20% in production of energy in Texas, depending on the month. As solar energy has the same time limits, these bitcoin miners will use a mix of energy sources throughout the year. Mining consultant Alejandro de la Torre, founder of Proof of Work.Energy, said that’s why Texas lawmakers are busy meeting with bitcoin mining executives from around the world. They are working to defuse the assumption that the energy consumption of the local bitcoin mining industry will harm the environment. If companies build from the ground up to optimize local sources of renewable energy, the industry can expand to bring in lucrative taxes as reliance on the oil and gas industry decreases.

“In Texas, they’ve been pushing renewable energy initiatives so it’s affordable to add wind and solar equipment,” said de la Torre. “I’m focused right now on connecting Chinese miners with businesses in Texas. One of the main reasons Chinese miners are interested in operating in Texas is that they believe the government is less likely to shut down their operations if they are located in Texas.”

When the pandemic began, Chinese facilities were managing approximately 65% of the global hashrate of the bitcoin network, compared to just 8% in the United States. It remains to be seen whether Texas bitcoin cowboys will help Americans conquer the industry by 2024, as Pan predicted.

ongoing in China regulatory repression on bitcoin miners now outweighs local economic incentives, the hydropower subsidies that made bitcoin mining so profitable in China. So these Chinese companies are moving to Texas and competing with American bitcoin companies like Riot Blockchain.

“Prior to this year, China was the biggest market for bitcoin mining equipment. So the standards and transformers have been optimized for China,” Pan explained, noting that miners are most profitable when hardware is optimized for the local environment, including the local power grid. “Manufacturers are already shifting to making hardware to American standards… Riot Blockchain started building in Texas two or three years ago, so they have the upper hand in Texas.”

So Pan said to believe Riot Blockchain will become one of the world’s leading bitcoin companies, rivaling Poolin, in the coming years. Meanwhile, Ward added that the best way for smaller Texas bitcoin miners like himself to become globally competitive is to tap into the renewable energy sector.

“When you can consume 20% of your electricity on-site and sell about 80% back to the grid, and you can shut down our miners in a minute if we need to during peak hours, that offers a huge benefit over smoothing out electricity. our supply and demand across the power grid,” Ward said, describing the benefits of building solar panels on site.

“We can still make money [when bitcoin miners are turned off] selling our remaining solar energy back to the wholesale system. It won’t hurt our profitability, but the relief it can provide to the end consumer could be huge,” he said.

Ward doesn’t want Geosyn Mining to remain small for long. The goal is for his company to bootstrap a $1 billion facility by starting small and leasing bitcoin miners to American retail consumers. Ward’s company buys and operates the machines, charging a percentage of the bitcoin mined, giving most of the newly mined bitcoin to remote customers.

“For example, a retired teacher managed to buy four ASIC miners of us that will earn you approximately two bitcoins in two years,” Ward said. “We plan to house approximately 2,400 of our own miners in this [second] location, as well as a significant number of client miners. Ultimately, this will provide us with the financial capacity to start our first solar farm by the end of the year.”

Although Texas renewable energy subsidies pale in comparison to the cheap electricity once supplied by chinese dams, Texan politicians are keen to attract industry experts by reducing the reputational risk associated with the environmental impact of bitcoin mining. In addition to Texas Governor Greg Abbott’s meeting with bitcoin miners and exaggerating industry, the main challenger to the GOP, former state senator Don Huffines, also announced his own pro-bitcoin mining strategy.

“I am committed to making Texas the Citadel of Bitcoin,” Huffines said in a statement. declaration.

Indeed, Energy Financers CEO Laura Pommer Fidler, who recently launched a bitcoin fund investment service that has two new natural gas-powered bitcoin mining facilities in Texas, said that “all the people who are running for office in Texas are now pro-bitcoin and want to make it easier for Texans to mine bitcoin.”

It appears that most of the Texan political candidates running for various offices in 2022 plan to make the bitcoin mining industry an integral part of Texas’ energy infrastructure.

“We are going to see exponential growth in the bitcoin mining industry in Texas,” she said. “Our customers are making profits in bitcoin or dollars, it’s their choice… We are waiting for more miners to arrive from China, we already have a share of mines.”

It is worth noting that EnergyFunders mining operations are off-grid, relying on natural gas. So they won’t add stress to the overloaded and congested power grid across Texas. Overall, only time will tell who will benefit from the millions of dollars worth of bitcoin being mined in Texas during this gubernatorial election and subsequent term.

“Texas is a whole different market,” Pan said, betting that any outcome will benefit bitcoin miners. “We want to do long-term business here.”

Pommer Fidler, who has previous experience working in the energy industry in Colorado and Wyoming, agreed.

“There are more on-grid facilities generating more bitcoin mining, plus a lot of people like the idea of ​​having fractional ownership of [EnergyFunders’] off-grid bitcoin mines,” she said. “Texas is the country of Bitcoin.”

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