Bitcoin Mining Raised Texas Electricity Rates 5%

Industrial-scale Bitcoin mining facilities in the US create as much carbon pollution as 3.5 million gas-powered cars, and Texas, which boasts the largest number of mining facilities in the country, will see the cost of electricity increase by nearly 5% by mid-2023 due to cryptocurrency mining.

These amazing numbers come from analyzes conducted by the tech nonprofit WattTime and the energy consultancy Wood Mackenzie for a New York Times investigation into the rise of large-scale bitcoin mining in the United States.

Bitcoin miners operate large arrays of computers to which fees are paid solve the cryptological problems which allows the currency to maintain a decentralized database of all the transactions. The survey found 34 mining operations, each drawing more than 40 megawatts of electricity; many of them were started in the US after China banned the activity there in 2021, partly due to concerns about electricity use.

Ironically, many of the mines were able to profit from agreements with electric grids to stop operations in case of emergency. Schemes to reward large power users who commit to shutting down when the grid is strained, whether they actually do so or not, predate bitcoin miners, but participating in them has brought tens of millions of dollars to their overall bottom lines.

Is bitcoin too big for Texas?

Texas, which Governor Gregg Abbott wants to be a “crypto leader,” has seen a lot of stress online in recent years, in particular rolling blackout in February 2021 and a failure in 2022 that left 70,000 people without electricity.

The additional load created by the miners, equivalent to tens of thousands of new homes, as well as their participation in incentive programs, increased electricity costs by nearly 5% statewide and by as much as 9% in some West Texas communities.

Riot Platforms, the largest miner featured in the New York Times story, said it paid 2.96 cents per kilowatt-hour of electricity in Texas in 2022. Other industrial power users in the state paid 7.2 cents, while residents paid 13 .5 cents.

Bitcoin supporters say that other industries are not judged on their power consumption and that they have no say in how the power they buy is generated. But internet experts say their constant demand for power makes bitcoin miners more dependent on fossil fuel-burning facilities.

The second question is whether their benefits match the costs: While most forms of power use provide some obvious added value, the jury is still out on what kind of benefits bitcoin and other cryptocurrencies provide to society beyond an opportunity for speculation.

Unlike other industrial power users, which usually generate jobs and products, bitcoin mines employ few people and the gains from the currency accumulate mostly for insiders. The price of a bitcoin has risen 76% this year to almost $30,000, but it is still more than 50% of its 2021 peak after the collapse of FTX and disillusionment with the idea of ​​”Web3″.