Why Are Cryptocurrency Miners Digging in Texas?
For years, China had made up the vast majority of all Bitcoin mining globally. Experts estimated upwards of 75% of the world’s Bitcoin mining operations were on Chinese soil. That was until the May 2021 government crackdown that completely banned cryptocurrency mining, effectively putting an end to all major mining operations across the country.
A later notice released in September that put a complete ban on virtually all crypto trading of any kind appeared to be the final nail in the coffin for crypto in China.
While underground illegal mining operations persist, most individual miners and mining companies had no choice but to pack up their equipment, leave their homeland, and set up shop overseas in a more crypto-friendly location to continue reaping in the profits. Though the ban is an unfortunate scenario for any crypto enthusiast in China, Bitcoin remains undeterred in the face of the law. In fact, the Bitcoin mining hash rate has just recently bounced back and completely recovered from the effects of China’s ban.
Many miners seeking refuge flocked to the United States, which as a result of the ban is now the globe’s dominant Bitcoin miner with an estimated 35% of the world’s mining. In second place is Kazakhstan with about 18%. One particular stand-out state in the US that’s been welcoming cryptocurrency miners with open arms is none other than the Lone Star State, Texas.
Why Texas? Several major reasons and incentives:
Low electricity costs thanks to a deregulated power grid and renewable energy from wind, natural gas, and solar power
Attractive tax incentives
Plenty of wide, open space
Pros are not without cons
Though Texas is being hailed as a crypto safe haven, not everyone is happy with the new influx of miners. A growing population and fast-expanding economy are adding to fears that these mining operations could be a strain on the state’s fragile power grid.
The demand for power will only increase as time goes on, and the grid’s aging infrastructure may not be ready for it in its current state. Texas’s power grid showed its faults in February when a powerful winter storm left millions of citizens without electricity for days, racking up $20 billion in damages, and leading to the deaths of over 200 people.
While there are efforts being made to help protect the state’s power grid from the effects of the blistering cold, concerns are high that this winterization alone isn’t enough. Whether or not lawmakers can reach an effective solution is something that will take some time and political navigation to achieve. Despite it all, however, one thing is for certain: the crypto mining business is booming and isn’t going away any time soon.
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Cloud Rush USA is a Southern California based cryptocurrency mining facilitator specializing in Filecoin mining plans. The views and opinions expressed on this Site are solely those of the author(s) and do not necessarily reflect the views of Cloud Rush USA or its employees. The content provided on this Site is for informational purposes only and should not be construed as investment, financial, or other advice.
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