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How Texas plans to be the bitcoin mining capital

STORY: Bitcoin mining is booming in Texas with 25 facilities already operating across rural areas.

Crypto mining consumes huge amounts of electricity

but the state is well placed to provide this power cheaply

even while the industry faces a proposed 30% tax on electricity usage.

Joshua Rhodes is a research scientist at the University of Texas.

“The price out in West Texas can be very low, sometimes negative. And because, you know, 80 to 90% of the input into a crypto mining operation is electricity, you know, the cheaper that electricity is, the more attractive it can be.”

Texas’s renewable energy sources like wind power is also inviting for miners.

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New York has already banned crypto mining that runs on fossil fuel power.

Alongside the obvious climate concerns, for Liz Moran from environmental nonprofit Earthjustice, the crypto industry also fails to deliver on employment.

"What's happening in a number of communities where these mining operations are coming in is they're promising a lot of jobs, but they're not delivering on a lot of jobs. So we absolutely need to be helping communities that have been economically struggling and getting more jobs. And we think the green energy sector is the way to go for that."

Other states are expected to follow New York's lead - and that's narrowing the field for industry leaders like Matt Prusak, CCO of US Bitcoin Corp.

“Environmentalists have many concerns around the environmental and the energy impact of Bitcoin mining. That's one of the reasons why US Bitcoin Corp, we've really tried our best to co-locate at or near wind, solar and other renewable energy sources.”

Power usage by bitcoin miners rose 75% last year, according to Lee Bratcher from the Texas Blockchain Council

"There is about 2,100 megawatts worth of Bitcoin mining in Texas, and that's up from around 1,200 last year and less than 600 the year before. So it's, it's growing considerably and that's at around 25 facilities across the state, mostly in rural areas, creating jobs and tax revenue for rural counties throughout the state of Texas."

However, the prospect of higher crypto demand on Texas’s grid has raised concerns.

In the state, around 250 people died in a winter storm blackout exposing the fragility of its power system.

The state is taking steps to maintain a reliable grid.

Lee Bratcher again:

“If power is in high demand, prices are high, power is in low demand, prices are low. And Bitcoin miners need those price signals. And we as citizens, who want a reliable grid, we want those price signals because we want people to consume electricity when there's too much of it. And we want people to curtail their energy use when there's not enough.”