Texas Is A Bitcoin “Hot Spot” Even As Heatwaves Hit Cryptocurrency Miners

Record-breaking heat waves have been documented around the world as extreme weather is getting worse due to climate change. States across America continue to see temperatures above 100 degrees Fahrenheit (38 degrees Celsius), while the UK has recently seen temperatures reach 104 degrees Fahrenheit (40 degrees Celsius).

While warm climates may be unusual for many of these regions, Texas, a state known for its hot summers, is experiencing warmer temperatures than usual. The Electric Reliability Council of Texas (ERCOT) recently said that Texas energy load demand has consistently broken records this month.

Unsurprisingly, the continuing Texas heatwave is having a major impact on cryptocurrency miners located across the lone star state. As Cointelegraph recently reported, some miners in Texas had to completely cease operations earlier this month to cope with the load on the Texas power grid.

Lee Bratcher, president of the Texas Blockchain Council, told Cointelegraph that there are about 10 industrial-scale and 20 small-scale cryptocurrency miners currently located in the region.

Earlier this month, ERCOT asked businesses and residents to voluntarily conserve electricity during the Texas heatwave. A Riot Blockchain spokesperson told Cointelegraph that its Whinstone facility in Rockdale is now participating in ERCOT’s Four Coincident Peak program, noting that the facility will reduce all energy to help stabilize the network during peak demand hours. . “As part of Riot’s participation in the program, the company reduced power consumption by a total of 8,648 megawatt hours in June,” the spokesperson said.

Peter Wall, CEO of Argo Blockchain, a cryptocurrency firm that recently opened a data center in West Texas, also told Cointelegraph that the company cuts down on mining operations when ERCOT sends a retention notice. On July 19, 2022, he stated that Agro had to go through this, along with many other mining operators in the area.

As a result, Bitcoin (BTC) miners saw the biggest drop in computing power on July 21, 2022 since China banned cryptocurrency mining in May 2021. This came as a surprise to industry experts who took it. they would expect Bitcoin hash rate difficulty to increase based on current trends. Frank Holmes, CEO of Hive Blockchain Technology, a publicly traded cryptocurrency mining company with operations in Canada and Europe, told Cointelegraph that Bitcoin’s hash rate difficulty was expected to increase by 3% each month based on the financial models, but this has not been the case for a number of reasons. He said:

“When the price of Bitcoin dropped, many S9 mining machines went out or the electricity went up and miners had to stop operations. Most importantly, many machines that needed to be connected now cannot be used, which also has reduced the difficulty.

Holmes noted that Bitcoin’s decline in computing power was beneficial to Hive as their structures were not affected by climate change or other factors. He added that new mining machines are being delivered to Hive every month and that the slots are being filled to accommodate the growth. However, Holmes shared that Hive continues to explore locations to establish its next mining facility in Texas, which will serve as the company’s first U.S. facility.

Despite the extreme weather conditions of the Texas miners, Holmes explained that Hive’s method of using 100% green energy to mine both Bitcoin and Ether (ETH) will not disrupt the state’s power grid. Holmes explained that Hive’s future facility in Texas will function as a solar wind farm, which will not be subject to ERCOT regulations. “There are various locations in Texas that have the infrastructure we need for this. There are also credits to guarantee the construction of a solar park ”.

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Although Holmes is confident that Hive will soon operate in Texas, he explained that the company has high ambitions for the facility, noting that it would require 300 megawatts of power. That said, Holmes explained that Hive is wary of setting up in Texas too quickly, pointing out that a large-scale mining operation is risky when it comes to delivering on time. “We don’t want to scare communities or disappoint our shareholders,” he noted.

Issac Holyoak, chief communication officer of CleanSpark, a sustainable Bitcoin mining and technology company, also told Cointelegraph that the company is planning to open a mining facility in West Texas. Although most of CleanSpark’s miners are located in Georgia, Holyoak explained that the company has a co-location agreement in West Texas with the energy company Lancium. He said:

“Lancium performs controlled load response, then builds large data centers that can be turned on or off based on the power curve. If a lot of energy is needed due to a hot afternoon, they can shut down to compensate for this. Alternatively, if there is a low demand for energy, they can upgrade and mine Bitcoin. “

According to Holyoak, the Texas-based CleanSpark and Lancium mining facility will be launched in December of this year. Like Hive, Holyoak noted that CleanSpark has benefited from the closure of miners in Texas as there is less network competition. But he believes it is beneficial for the company to have operations in Texas due to the abundance of renewable energy in the region, along with the welcoming nature of the counties seeking to increase trade from mining operations.

“It is a very single market and has extremely important renewable resources for sustainable miners,” he said. With offices in Georgia and some in New York state, Holyoak added that it’s important for CleanSpark and other miners to diversify their locations, noting that climate change and other extreme weather events can occur anywhere.

Will sustainable mining help Texas miners?

Although Texas-based miners are hit by severe heat, Holmes believes many of them are managing the situation well by shutting down when needed. However, as more sustainable miners enter the state, established traders may want to reconsider their mining techniques.

For example, Holmes explained that Hive educates authorities in the regions where they are based to help them understand their long-term environmental, social and governance goals. He said:

“In Quebec, we have a 40,000 square foot building with 30 megawatts of electricity and we send the heat generated by our ASIC mining machines to heat the building’s 200 square feet. The energy is recycled and is designed to house the unique building structures in New Brunswick. “

That being the case, Holmes noted that having a long-term sustainable view when it comes to mining can be very beneficial. He added that Hive’s Sweden office has software that ensures that the company’s mining operations are stopped between 7am and 9am and between 5pm and 7pm, five days to the day. week. “These are sensitive peak demand times. We have a strategic relationship with the region to ensure that our operations stop when needed, “said Holmes. He also shared that Hive mines around 9.8 BTC and 100 ETH per day.

Taking a different approach, CleanSpark uses immersion cooling to mine Bitcoin. Matthew Schultz, executive president of CleanSpark, told Cointelegraph that the company is among the first large-scale data centers of its type in North America to purchase immersion cooling infrastructure for their Norcross mining facility. He explained:

“Immersion cooling is a technique we use for Bitcoin mining. Mining machines are prepared by removing their fans and immersed in tanks of biodegradable mineral oil. This increases the mining efficiency by around 20%. The oil is recycled through the facility and reused as it flows through a heat exchanger that keeps the temperature around 125 degrees F.

Holyoak added that most fan-based mining operations are kept cool using ambient air, so warmer climates will affect the machines’ performance, but immersion cooling can help mitigate this factor.

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He noted that immersion cooling will not be affected by excessive heat. However, heat waves can raise energy prices, which in turn can make machine operation uneconomical. According to Holyoak, this is likely the case with Riot, as the company announced the use of immersion cooling at its Whinstone facility last year.

All in all, industry experts believe that using clean energy sources will help miners prevail against climate change. Elliot David, a carbon management specialist at Sustainable Bitcoin Protocol, a company that tests sustainable Bitcoin mining practices, told Cointelegraph that, based on recent events, every mining company will need to think about climate resilience, regardless of whether it is located. in a hot climate like Texas or cold climates like Norway:

“Using clean energy sources is also an important solution because, although they are intermittent, energy systems are all truly exercises of balance. The network has to meet demand with supply, and flexible payloads like Bitcoin make those balancing acts much easier. “