War to lure Bitcoin miners pits Texas against New York, Kentucky

War is brewing between countries to attract them Bitcoin Miners, and new data shows that a significant number of them are heading to New York, Kentucky, Georgia and Texas.

Within the United States, 19.9% ​​of the Bitcoin hash rate — the collective computing power of miners — is in New York, 18.7% in Kentucky, 17.3% in Georgia, and 14% in Texas, according to Foundry USA, the largest mining pool in the world. North America is the fifth largest in the world.

A mining pool allows a single miner to combine their hash power with thousands of other miners around the world, and There are dozens Who do you choose.

said Nick Carter, co-founder of Castle Island Ventures, which presented the Foundry data at the Texas Blockchain Summit in Austin on Friday. “This is a much more efficient way to find out where mining is taking place in America.”

But as Carter points out, the Foundry dataset does not take into account all of the mining hash rate in the United States, as not all mining farms located in the United States recruit the services of this pool. Blockchain riotFor example, it is one of the largest publicly traded mining companies in America, with a large presence in Texas. They don’t use Foundry, so their hash rate isn’t factored into this data set – which is part of the reason they underestimate their Texas mining presence.

Although the data set captures only a portion of the country’s domestic mining market, it points to national trends that are reshaping the carbon footprint debate.

Many of the top-ranking countries are renewable energy hotspots, a fact that is already beginning to rework the narrative among skeptics that bitcoin is bad for the environment.

While Carter acknowledges that mining in the United States is not entirely renewable, he says that miners here are much better at choosing renewable energy sources and buying offsets.

“Immigration is definitely net positive overall,” he said. “Moving hashrate to the United States would mean much lower carbon intensity.”

Where did all the miners go?

when Beijing decided to expel her All crypto miners this spring, nearly half of the bitcoin network went dark practically overnight. Although the network itself did not skip a moment, the incident triggered the largest exodus of Bitcoin miners ever.

Foundry’s dataset shows that the largest bitcoin mining operations are in some of the most innovative states — a game-changer for the debate around bitcoin’s environmental impact.

As large-scale miners compete in a low-margin industry, where their only variable cost is usually energy, they are incentivized to migrate to the world’s cheapest energy sources – which also tend to be renewable.

Take New York, which tops Foundry’s rating. A third of its generation within the country comes from renewable energy sources, according to the latest available Data from the US Energy Information Administration.

New York is counting its nuclear power plants toward its goal of 100% carbon-free electricity and, crucially, New York Produce more hydroelectricity than any other state east of the Rocky Mountains. It was also the third largest hydroelectric power producer in the country.

New York’s cold climate – in addition to its previously abandoned industrial infrastructure ready for reuse – also made it an ideal place for bitcoin mining.

Mining firm Crypto Coinmint, for example, operates facilities in New York, including one at the former Alcoa Aluminum smelter in Massena, which takes advantage of the area’s abundant wind power, as well as cheap electricity produced from dams that line the St. Lawrence River. The Massena site, with 435 megawatts of transformer capacity, is one of – if not – the largest Bitcoin mining facility in the US

New York has been considering legislation this year to ban bitcoin mining for three years so it can conduct an environmental assessment to measure greenhouse gas emissions. But lawmakers have largely backed away from it since then.

“Bitcoin mining in New York is very low in carbon intensity, due to its hydropower, and as a result, if New York were to ban bitcoin within the country, it would likely increase the carbon intensity of the bitcoin network in general,” Carter said. “It would be the exact opposite of what they want.”

Other countries that command a large share of the bitcoin mining industry in America include Kentucky and Georgia.

In addition to the fact that the governor of Kentucky is friendly to the industry, having just passed a law this year that grants certain tax breaks to crypto-mining operations, the state is also known for its hydropower and wind power.

Connecting stranded rigs to power, such as natural gas wells, is another source of energy. Although coal is also a large player in the energy mix, many mining operations there are drawn to renewable energy sources.

Then there is Texas

Texas may rank fourth according to Foundry’s data set, but many experts believe there is no doubt that it is the main jurisdiction for miners at the moment.

Some of the biggest names in bitcoin mining have set up shop in Texas, including Riot Blockchain, which owns a 100-acre site in Rockdale, and Chinese mining company Bitdeer, which is right across the road.

Orders for new ASICs – the specialized equipment used to mint new bitcoins – show that tens of thousands more are set to be delivered in Texas, According to The Block Crypto.

Texas’ allure boils down to a few big basics: crypto-friendly regulators, an unregulated power grid with real-time spot pricing, and perhaps most importantly, access to substantial renewable spare capacity, plus stranded or smoldering natural gas. .

The regulatory red carpet being rolled out for miners also makes the industry predictable, according to Alex Brammer of Luxor Mining, a cryptocurrency pool designed for advanced miners.

“It’s a very attractive environment for miners to use large amounts of capital in,” he said. “The sheer number of land deals and power purchase agreements that are in various stages of negotiation is enormous.”

Some miners connect the network directly in order to run their rigs. ERCOT, the organization that operates the Texas grid, has the cheapest utility-grade solar in the country 2.8 cents per kilowatt-hour. The grid is also rapidly adding wind and solar power.

“You can’t beat the cost of energy in West Texas, and when you pair that with a skilled energy management company that can run demand response programs, it’s almost unbeatable anywhere else in the world,” Brammer continued.

Unsupervised networks tend to have the best economics for miners, because they can buy instant energy.

“They can participate in economic activity, which means they stop buying electricity when prices are going up, so you have more flexibility if you’re active in the spot markets,” Carter explained.

Another major energy trend in the Bitcoin mining business in Texas is the use of “stuck” natural gas to power drilling rigs, which reduces greenhouse gas emissions and makes money for gas providers, as well as miners.

If this were fully exploited, Carter says, gas flaring in Texas alone could power 34% of the bitcoin network today — which would make Texas not only the clear leader in bitcoin mining in the US, but the world.

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