The state is hoping to avoid a repeat of the carnage seen in February 2021, when widespread power outages caused extensive disruption.
Texas is on the brink of an Arctic blast that is forcing crypto miners to shut down their operations — raising questions about the state's suitability to serve as a Bitcoin mining hub.
Bloomberg has reported that Texas Governor Greg Abbott met with crypto executives last fall — requesting them to power down during the cold winter months to stop the electricity grid being overwhelmed.
The state is hoping to avoid a repeat of the carnage seen in February 2021, when widespread power outages caused extensive disruption. More than 10 million people were left without electricity, some of them for days, causing an estimated $130 billion in economic losses. Some experts even believe this figure is conservative.
Although Texas is appealing because of low energy costs — and the U.S. has become the biggest source for BTC mining since China stepped up its clampdown last year — the prospect of regular interruptions because of the weather could make the state less attractive.
Bitcoin's price has been known to fall sharply whenever a large amount of the total computing power fueling the network falls offline — as seen when China banned mining, and when unrest in Kazakhstan led to internet blackouts.
Abbott has warned that "no one can guarantee" that the lights will stay on for everyone as a cold front moves in. Power lines could be downed by ice, and the supply of natural gas is also being affected by the freezing weather.
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Riot Feels the Heat
Riot Blockchain says it has decreased its power consumption by 98% to 99% — and is currently using about 1% to 2% of the power it usually gets through in an attempt to ease pressure on the grid. On Twitter, the publicly listed company said:
"We deeply value our relationship with the surrounding community, and we are prepared to support that community with the resources at our disposal."
Riot's share price has tumbled by close to 10% over the past two days, with traders clearly focusing their concern on the impact that this outage will have on the company's bottom line.
Other Texas-based miners, including Rhodium Enterprises, are following suit. Its CEO tweeted:
"We are proud to help stabilize the grid and help our fellow Texans stay warm."
It isn't all bad news for miners who opt to cut their energy usage, as they'll be paid to do so by the Electricity Reliability Council of Texas.
While most in the industry are keen to act responsibly — and show that mining can be a positive thing for Texas — the requirement to power down is voluntary.
