Over the weekend, a heat wave burned Texas in triple-digit temperatures, surpassing century-old records. Because of the high heat in central Texas (temperatures surpassed 110 degrees), the state’s grid operator warned Monday that rolling blackouts were “possible” in the coming days and advised families and businesses to decrease power use.
As expected, Bitcoin miners moved to Texas in 2021 after China prohibited the sector.
As of Monday, “almost all industrial scale Bitcoin mining” operations in Texas had shut down, allowing the state to redistribute 1,000 MW of electricity. It was confirmed by Lee Bratcher, head of the Texas Blockchain Council. According to Bratcher, that’s 1% of the Texas grid’s power.
Bitcoin Miners Halt in Texas
During crises like the February snowfall in Texas, BTC miners shut down. Bitcoin mining utilised less electricity, freeing up power for heating.
Rhodium CEO Nathan Nichols tweeted his company’s delight in stabilising the grid and keeping Texans warm.
However, miners aren’t turning off their rigs out of benevolence; financial concerns are at play.
ERCOT Negotiates Output Limits for Peak Demand
The Electric Reliability Council of Texas (ERCOT), which administers the state’s electrical grid, negotiates “demand response” agreements that pay businesses—including Bitcoin miners—to cut output during peak demand. Bitcoin miners can turn their operations on and off at the flip of a button, thus it makes more financial sense for them to take ERCOT’s award than mine Bitcoin during moments of high electrical demand.
Profitability for Bitcoin miners hinges on energy costs being lower than Bitcoin values. Due to this equation, miners favour Texas’ cheap electricity. For Bitcoin miners, weather-related demand surges entail higher electricity prices and less profit.
A miner can gain up to 10% of its annual revenue by shutting down the grid, according to energy management company Voltus. Given Bitcoin’s value, miners should grab their pay and head home while the sun is still up.
