Bitcoin Mining Farms in Texas Offline From Winter Storm
Bitcoin farms in Texas have shut down due to a severe winter storm that drained the state’s power grid.
While some mining farms have shut down due to power outages, others are selling electricity back to the grid at a premium, according to Ethan Vera, co-founder of Luxor Tech, a US-based cryptocurrency mining company. According to Vera, most mining farms do not work.
Due to an outage in Texas, the hashrate of Luxor’s mining pool has dropped by 40%. Most of the hashrate for the entire mining pool comes from US mining farms.
While it’s unclear what the exact percentage of the global mining pool hashrate comes from facilities in Texas, some of the largest Bitcoin mining companies (BTC, -2.2%), such as Bitmain and Layer 1, operate in Texas due to cheap government electricity.
Crypto mining giant Bitmain built one of the world’s largest bitcoin miners in Rockdale, East Texas in 2019. Backed by Peter Thiel, crypto mining company Layer1 Technologies opened its bitcoin factories in West Texas in early 2020. The publicly traded bitcoin mining company Argo Blockchain (ARB) announced last week that it intends to acquire land to build mining facilities in West Texas.
Some mining farms are taking advantage of the situation by selling unused electricity to local residents. Some bitcoin miners have been able to cash in on selling their unused energy back to the network for huge profits, JP Barich, CEO of Texas-based mining company MiningStore, said Sunday.
According to Dan Woodfin, senior director of the Texas Electricity Reliability Board (ERCOT), the Texas power grid has already lost a small chunk of energy production over the past weekend because wind turbines have been frozen and natural gas is running out for power plants.
By Sunday, all types of energy sources, including nuclear power plants, coal-fired plants and thermal generators, had fallen off the grid due to a winter storm, Woodfin said, according to a report by the Austin American Statesman.
According to TechCrunch, about 30 gigawatts of power are off, of which 26 gigawatts are from thermal power and the rest from wind sources. The impact of extreme weather conditions on bitcoin mining facilities extends beyond Lone Star State. Mining farms in Kentucky have also been hit by storms.