Texas Takes the Lead in Bitcoin Mining in the US
According to recent data published by CNBC, Texas has emerged as the leading state for Bitcoin mining in the US, accounting for over 28% of the country’s entire hashrate. This comes after China banned Bitcoin mining in 2021, causing a shift in global mining power. Previously, China held the majority of the hashrate, but it has now dropped to 21%. The US currently accounts for nearly 38% of the global hashrate used for Bitcoin mining.
Bitcoin Mining Distribution in the US
The distribution of Bitcoin mining hashrate in the US is not uniform. In 2021, Texas accounted for only 8.5% of the national hashrate, with New York State and Kentucky surpassing it. However, with China’s ban, Texas experienced a boom and now dominates the ranking with 28.5% of the national hashrate. This can be attributed to Texas’ large availability of low-cost electricity from waste sources like flare gas. Texas ranks as the third-largest state globally for Bitcoin mining, behind China and Kazakhstan.
CNBC’s Analysis and Future Challenges
CNBC compiled its article based on an interview with Kevin Zhang, a long-time participant in Bitcoin mining. Zhang highlighted that next year’s halving will be a significant test for miners, as their revenues will be cut in half overnight. Despite this challenge, Texas remains an attractive location for miners due to its cost-effective regulations and support from local authorities and energy grid operator ERCOT. Additionally, Bitcoin mining allows for the exploitation of waste energy resources such as flare gas and excess electricity.
Mining as Waste Exploitation
Bitcoin mining provides an opportunity to monetize energy resources that would otherwise go to waste. This includes flare gas from oil fields and excess electricity that cannot be stored on a large scale. By using this energy for mining, it becomes a profitable operation for companies, especially when Bitcoin prices are stable. Several publicly traded crypto mining companies in the US take advantage of low-cost energy, including waste from processing or distribution processes.
Hot Take: Texas Emerges as the Leader in Bitcoin Mining
Texas has risen to become the leading state for Bitcoin mining in the US, surpassing China’s former dominance in the industry. With over 28% of the country’s hashrate, Texas benefits from its abundant and low-cost energy resources, including flare gas and excess electricity. The state’s favorable regulations and support from authorities make it an attractive destination for miners, leading to a small migration of mining operations to Texas. As Bitcoin mining continues to evolve, challenges like the upcoming halving will test miners’ profitability. However, with its current position and advantages, Texas is poised to maintain its leadership in Bitcoin mining.
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