- Mining operators in Texas have slowed their operations, given global power shortages.
- Symptoms of the glut include selling electrical equipment and a bottleneck to stifle the inflow of new mining companies.
- Around the world, miners are facing steep challenges, but Bitcoin’s hash rate still stands at a decent 215.85 EH/s.
Texas was once seen as Canaan for miners fleeing troubled times in China, but 12 months down the line, the fairy tale has turned into a nightmare for some mining companies.
Mining Bitcoin in Texas has been halted after the state’s power regulator rolled out several policies for miners. The Electric Reliability Council of Texas (ERCOT) began slowing down the issuance of new permits to mining firms on the grounds of falling energy supply.
For mining firms with pockets to acquire permits, there is still the challenge of successfully building out infrastructure to plug into the power grid. Mining companies will have to provide generators and power lines to start operations, tilting the balance out of their favour.
“There are very few or no sites where you’re just going to show up and plug in without any work,” said Steve Kinard, a leading executive at the Texas Blockchain Council. Kinard added that desperate firms have searched for available opportunities but found none.
Things fall apart
Although the capitulation of miners was a global phenomenon, Texas mining firms took things a notch higher. Failure to get operational licenses forced several firms to sell their equipment.
Ethan Vera, CEO of Luxor Technologies, said, “we continue to see fire sales of transformers, power distribution units, and other equipment that mining farms can’t use due to power constraints.”
Some companies have resorted to laying off their staff to remain afloat, but ERCOT justifies its stance as being for the greater good. A spokesman noted that the body is “working with a group of stakeholders to develop proposed rules for how best to leverage these loads on the grid during times of stress.”
To maintain electricity supply, ERCOT employs curtailment – asking operational miners to forfeit power in exchange for credits. Riot Blockchain revealed that it earned $9.5 million in energy credits in July alone.
The allure of Texas
Fleeing Chinese miners were drawn to Texas because of its relatively cheap supply of energy that was available in abundance. The state’s politicians relished the jobs and the taxes that flowed into its treasury from mining activity.
Greg Abbott, the state’s governor, took to Twitter to proclaim that “Texas will be the crypto-leader”. The big mining companies had staked their claim for a piece of the Texas pie in no time.
Billionaire hedge fund founder Ray Dalio has stepped down as chief executive of Bridgewater Associates, according to a transfer of voting rights on September 30. Bridgewater’s co-chief executive explained on Tuesday that “Ray no longer has the final word,” in regard to the hedge fund’s future. Hedge Fund Giant and Bridgewater Associates Founder Ray Dalio […]
In Singapore, LBank, a major cryptocurrency exchange, participated in Token 2049 as a sponsor and exhibitor. At the Token 2049 venue, LBank was welcomed with open arms and went on to host a prosperous after-party. Singapore, one of the burgeoning major crypto hubs, welcomed a diverse crowd of enthusiasts and provided LBank with a beautiful […]
Back at the beginning of the year, some notable celebrities had been named in a lawsuit over the alleged Ethereum Max (EMAX) scam. These celebrities included reality star Kim Kardashian, boxing legend Floyd Mayweather, as well as former professional athletes Paul Pierce and Antonio Brown. The class action lawsuit had accused the celebrities of pumping […]
According to a filing published by the U.S. Bankruptcy Court for the Southern District of New York, the crypto lending firm Celsius has been given a final bid deadline of October 17, 2022. Following the bankruptcy court’s final bid deadline, a sale hearing is scheduled for November 1. A report published last week noted that […]
Ever since losing around 80% of its value from its all-time high, Bitcoin has been questioned as a store of value and a digital equal to gold. The digital currency still records the best performance for any asset across the last decade, but critics are fast to point out past year’s losses. Related Reading: Crypto […]
Bitcoin (BTC) accumulation is seeing a massive surge as it rises to levels last seen in 2015.