Texas now dominates US Bitcoin mining, holding 28.5% of the nation’s hash rate, driven by strategic policies and industry shifts.
Texas emerges as the dominant force in the United States Bitcoin mining scene, capturing a staggering 28.5% of the country’s hash rate. This significant shift in the crypto-mining landscape is not merely a random change but the result of well-thought-out policies, industry responses, and market dynamics.
A Monumental Rise in Texas’s Bitcoin Mining Prowess
In a recent revelation by Foundry, the world’s largest Bitcoin mining pool, Texas now boasts a commanding position in the U.S. Bitcoin mining sector. Just two years ago, in 2021, Foundry’s data indicated Texas’s hash rate share was a mere 8.4%. Contrast this with the recent figure of 28.5%, and the growth is undeniable. This information comes directly from Foundry’s user data, which they diligently collated and shared with the public.
During the same period, states previously holding higher hash rate shares experienced significant declines. For instance, New York, which had a 9.5% share in 2021, now lingers at 8.8%. Georgia, once the leader with 34.2%, plummeted dramatically to just 9.6%. Several factors contribute to these shifts. Georgia’s decline, for example, was influenced by a prominent miner from the 2021 survey not contributing to the 2023 data. But it’s also worth noting that Texas’s growth played a part in this shift.
New York’s stagnation in mining is attributed to a memorandum targeting fossil fuel-powered miners implemented last year. This move curbed growth and likely diverted some of the mining activities. Other states like Nebraska, North Carolina, Kentucky, Oklahoma, and Washington weren’t spared either, all witnessing considerable reductions in their shares.
Texas: A Magnet for Bitcoin Miners
Texas’s rise in the Bitcoin mining realm is not accidental. The state has proactively rolled out incentives to lure miners.
A unique proposition by the Texas government aids in the stabilization of the electricity grid. In periods of high demand during scorching summers or freezing winters, ERCOT, the grid operator, calls upon miners to halt their operations. This move ensures that homes receive the necessary power. Later, these miners get compensated for their cooperation.
Such measures benefit both the miners and the state. For instance, Riot, a significant player in the mining industry, mentioned the cost-saving advantage of the state’s power credits. These credits substantially reduce Riot’s Bitcoin mining expenses. Building on this, Riot is setting its sights on expansion, targeting Navarro and Milam counties for growth. Notably, their plans came on the heels of Cipher Mining’s move to procure 11,000 mining machines for their Texas-based facility in May.
Foundry is not staying behind either. They’ve made significant inroads into Texas, securing mining locations from the bankruptcy assets of Compute North. The latter unfortunately succumbed to the pressures of a bear market the previous year.
More Supporting Evidence
Interestingly, Foundry speculates that their 28.5% estimate for Texas might be on the conservative side. The data, sourced in July, came during a major downtime for the region’s miners. Hence, the real figure could be even higher.
The University of Cambridge, renowned for publishing data on Bitcoin hash rate and electricity usage, last updated its mining map in January 2022. At that time, Texas’s share was 11.2%. Alexander Neumueller, Cambridge Research Lead for Digital Assets Climate Impact, shared their intent to refresh the data by next year. He emphasized the importance of a comprehensive sample size and avoiding undue influence from any single mining pool. As of now, Cambridge has partnered with ANTPOOL, the second-largest pool after Foundry.
Industry insiders and researchers are not taken aback by Texas’s meteoric rise. Conversations with stakeholders have long indicated that Texas was poised for growth. The mining landscape has undergone significant transformations since January 2022, especially with respect to China and Kazakhstan, but Texas’s ascent remains the highlight of the story.