According to Bloomberg News, the increase in cryptocurrency mining in rural Texas has caused an inflated demand for electricity, housing, and other necessary services that the State is failing to provide.
A large part of Texas that is developing mining hubs lacks the necessary infrastructure to support the influx of out-of-state workers who demand hotel accommodations, petrol stations, and restaurants.
Failing Power Grid
Texas became the crypto mining hub with its pro-cryptocurrency regulations, cheap electricity, and low taxes. However, the power grid has faced higher demand leading to an increasing problem.
Nevertheless, despite government backing, the placement of cryptocurrency miners in rural Texas has posed its own challenges: “The housing situation out there is tricky,” Cormint Data Systems CEO Jamie McAvity told Bloomberg.
Collin McLelland, CEO of Digital Wildcatters, said, “You can bring all these jobs to rural Texas, but then you have to be able to lodge these people.” The quantity of power in Texas is part of the State’s allure. Still, the dependability of the State’s electric infrastructure is a key reason for concern.
Regulating Power Consumption
The Electric Reliability Council of Texas (ERCOT), issued a statement indicating that Texas was facing a severe heat threat that could affect crypto miners. Financial incentives are offered to crypto miners that turn off their electricity during peak hours.
“Bitcoin mining is not going to solve all the grid’s problems, but it is a part of the solution, to be sure,” said Lee Bratcher, head of the Texas Blockchain Council, in an interview with CBS News. Even though Texas attracted miners due to its capacity to offer cheap and abundant electricity fast and link mines to the power grid, there are also apparent disincentives.
William Magnuson, a specialist in cryptocurrencies and Texas A&M Law School law, told CBS News that the crypto mining places a large strain on the electricity infrastructure. According to the Texas Blockchain Council’s statistics. In the next two years, the number of crypto miners in Texas is projected to quadruple, making the State the greatest Bitcoin producer.
CBS News estimates that generating a single Bitcoin in Texas consumes an amount of energy equivalent to powering a typical Texas house for 62 days.