Bitcoin’s Network Hashrate Declines by 25% Amid Texas Cold Snap
Bitcoin’s network hashrate has dropped by around 25% in recent days due to requests from the Texas grid regulator following extreme cold weather. Texas has become a global hub for the crypto industry, attracting miners with cheap electricity and a deregulated energy market.
Texas Emerges as Bitcoin Mining Hub After China Crackdown
China was previously the leader in Bitcoin mining, but crackdowns by regulators have caused a decline in its dominance. Texas has emerged as an alternative hub, with miners arguing that the industry’s flexible electricity use can help strengthen the state’s power grid. Several companies, including Marathon Digital, Riot Platforms, and Iris Energy, have established mining facilities in Texas due to cheap electricity and grid incentives.
Texas Miners Familiar with Curtailment Requests
Texas Bitcoin miners are accustomed to curtailment requests. In August, Riot Platforms and Iris Energy received significant power and demand response credits after voluntarily reducing their power usage during a heatwave. The flexibility of the mining industry’s electricity use allows it to curtail demand during peak periods and inject power during low-demand periods.
Hot Take: Texas Becomes a Leading Destination for Bitcoin Mining
As China’s crackdown on Bitcoin mining continues, Texas has emerged as a prominent destination for miners. The recent decline in Bitcoin’s network hashrate due to the Texas cold snap highlights the vulnerability of mining operations to extreme weather conditions. However, Texas offers attractive advantages such as cheap electricity, a deregulated energy market, and grid incentives. The flexibility of the mining industry’s electricity use also benefits the state’s power grid by curbing demand during peak periods. With companies like Marathon Digital and Riot Platforms setting up mining facilities in Texas, the state is solidifying its position as a global hub for Bitcoin mining.
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