The Tech Transparency Project accuses bitcoin miners of covertly exploiting Texas's energy market. In August 2023, Riot Platforms earned $32 million from curtailing operations, significantly outpacing their bitcoin sales revenue.
Earnings from Curtailing Operations
In August 2023, Riot Platforms earned $32 million from curtailing mining operations, far surpassing the $8.6 million they made from selling bitcoin. This trend highlights that miners are increasingly earning more from participating in the energy market than from actual cryptocurrency mining.
Critics and Rescue Schemes
Riot Platforms, which operates the world's largest bitcoin mine in Rockdale, Texas, has been central to this controversy. The company benefits from emergency schemes offered by the Electric Reliability Council of Texas (ERCOT). On days of peak electricity demand, miners like Riot either sell their power back to providers at inflated prices or temporarily shut down operations for a fee. Critics argue that this behavior exacerbates the state's energy woes, especially as Texas faces increasing pressure on its grid due to extreme weather and population growth.
Future of Bitcoin Mining in Texas
Texas lawmakers are beginning to turn against the crypto industry, questioning its long-term benefits. Dan Patrick, the lieutenant governor, has criticized the industry for consuming vast amounts of energy while creating few jobs. He warned that Texas could no longer afford to be the “Wild Wild West” of data centers and crypto miners, especially when these businesses contribute to grid instability. The industry, however, defends its practices, claiming it provides critical flexibility to the grid.
The growing tension between the state and the crypto industry could lead to new regulations. Last year, a bill aimed at restricting miners from participating in demand-response schemes passed the Texas Senate but stalled in the House. As Texas's energy challenges mount, the future of bitcoin mining in the state hangs in the balance.
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