Crypto miners in Texas must get approval from ERCOT to connect their rigs to the state’s power grid.
Texas Requires New Permissions Before Crypto Can Be Mined
It has come to the attention of the crypto world that Texas has become the place to be if one wants to set up a crypto mining business. The state provides vast open spaces and low electricity rates, and it appears many miners have moved their operations to the state to take advantage of Texas’ offerings.
The state has also garnered newfound attention from miners in China. Not long ago, the Asian country decided to ban all crypto mining activities, citing new rules from Beijing that were designed to make the country more carbon neutral. Despite housing roughly 65 to 75 percent of the world’s crypto mining projects, the country’s regulators announced they all either had to find new homes or pack up for good.
It appears many were not ready to give up their businesses like that, and thus turned to Texas to continue in their respective industries. Thus far, the growth of the mining sector has led to vast economic growth and a development of new jobs, but it has wreaked havoc on the state’s electricity system, and now miners must get special permission to hook their machines up to the region’s main source of power.
The Texas Blockchain Council estimates that the number of crypto mining projects in the state will quadruple in about two years. This would mean that Texas is well on its way to becoming the biggest producer of bitcoin in the world.
William Magnuson – author of “Blockchain Democracy” – is not convinced this is a good thing, and that such power usage would prove damaging for Texas in the end. He stated in an interview:
This will put a massive amount of stress on the Texas energy grid. We know the Texas energy grid has had its struggles in the last couple of years, so I do worry about the effects of imposing massive new energy use on a grid that we know has been relatively unstable.
He feels that the new energy regulations set in place by ERCOT are steps in the right direction. However, he doesn’t think this will be enough. He believes that what state regulators do with the information they receive from mining projects will have the biggest say in Texas’ future. He says:
How are they going to weigh the costs and benefits of adding these new mining companies to the grid? That is where the rubber meets the road.
Could This Be a Good Thing?
By contrast, Lee Bratcher of the Texas Blockchain Council thinks the information ERCOT obtains from miners will help the organization toughen the state’s energy grid. He commented:
We actually see this approval process as a positive development.