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January 28, 2022 at 2:32 am #155152AnonymousGuest
Governor Abbott thinks Bitcoin mining could incentivize power production that stabilizes the Texas grid.
Other jurisdictions have outlawed Bitcoin miners for placing added stress on their grids.
In recent months, Texas Governor Greg Abbott has made concentrated efforts to bring the crypto industry to his state. Besides seeing it as lucrative, he believes the growth of Bitcoin miners could counterintuitively help stabilize Texas’ electricity grid, which has struggled to keep up with demand.
Bitcoin mining has often been criticised for being energy-intensive, which many argue isn’t worth the environmental cost. However, a growing number of Texas politicians, including Senator Ted Cruz and Austin Mayor Steve Adler, are viewing it as a solution to other energy-related issues. That includes Gov. Abbott, who hopes that by drawing Bitcoin mining to the state, power providers will step up to build more infrastructure—benefiting everyone.
Voters in the Lone Star State have mostly disapproved of the handling of the Texas electrical grid, which has often been unable to provide enough affordable power during peak times. Last winter, power outages during a harsh storm contributed to several hundred deaths in the state.
Abbott’s is a risky bet for the grid, yet one that Bitcoiners have been promoting for years. On one hand, the industry creates unprecedented financial incentive to produce more energy. On the other, it ultimately involves bringing greater demand and stress onto an already rickety grid.
The governor is depending on Bitcoin miners to pause operations when ordered to do so—particularly when energy demand surges. This approach would mimic that of Iran, which has imposed a winter-long ban on Bitcoin mining to prevent blackouts from plaguing the country further. Though skeptics argue that mining businesses can ill-afford to stop and start production for extended periods, two miners in the state have already agreed to obey the governor’s request to voluntarily pause operations when energy gets scarce.
“It’s really a healthy dynamic that brings tax revenue, brings job creation and also is a grid strengthening mechanism,” said Texas Blockchain Council President Lee Bratcher in an interview with Bloomberg. “Governor Abbott’s been very supportive.”
According to the Texas Blockchain Council, there are at least 27 mining operations in the state. More are on the way, including Digital Currency Group-backed Foundry.
The growth of miners in the region has been especially strong thanks to other countries outright banning the proof-of-work process. China—once the Bitcoin mining center of the world—has ejected its miners as part of a larger crackdown on cryptocurrencies, leaving many to flee to the United States. Meanwhile, Kosovo has outlawed it due to the more straightforward idea that the industry is straining the grid and causing energy prices to rise.
The migration has provided a counterpoint to environmentalist arguments against the industry. Compared to China’s dirty coal mining, many of the miners developing in Texas and across the U.S. are dependent on renewable power. Last year, Block CEO Jack Dorsey and ARK Invest CEO Cathie Wood released a joint study arguing that Bitcoin could actually incentivize renewable energy adoption.