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Crypto mining entrepreneurs are homing in on Texas for its cheap energy costs.
Dickens county, in rural Texas, has a population of 2,300, and in the words of Kevin Brendle, a top county official, “is mostly improved pasture and grassland.” Yet, its idyllic environs will soon be home to a 320-acre crypto facility where hundreds of computers will be used to mine bitcoin, each currently worth about $45,000. The draw: The state’s cheap power. (The Guardian)
Crypto miners relocating from China
China was a global center for crypto mining because of the availability of cheap energy, often from fossil-based plants. After the authorities banned their operations, Chinese crypto miners have been looking for alternative sites across the globe to relocate. However, cheap energy is a must – to run the computing machines and in cooling the facility.
Texas offers many advantages. Because electricity is deregulated, energy suppliers have to keep their rates low to attract and retain consumers. Many suppliers are willing to ink long-term, fixed-price energy supply contracts with bitcoin miners.
Consumers holding a power purchase agreement may also, in certain circumstances, sell their allocated energy back to the power utility. This happens most often in summer months when demand for electricity peaks, and the power company may even have to pay a mining facility to reduce the energy it draws from the grid.
Another reason Texas is attractive to crypto miners is wind power, which constitutes about a fifth of the energy produced in the state. That makes mining here more climate-friendly than China.
What’s in it for Texas
The arrival of a mining operation could make a sea change to the local economy of a rural Texas county such as Dickens. It would generate employment for the people and tax revenue for the government.
Texas politicians have seized on these advantages, losing no time to market the state as a Mecca for crypto mining.
They have even gone ahead and passed a law that makes it easier for cryptocurrency businesses to operate in the state.
“We’ve seen a good combination of political will with the reality of the electricity market there that have led people to start building in Texas,” Josh Goodbody, chief operating office of Qredo, a digital asset management company, told The Guardian.
“Increasingly, people are looking at Texas as a friendly place to build crypto businesses.”
Related Story: The Texas Grid Pays Thiel-backed Layer1 to not Mine Cryptos in August
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