Bitcoin mining farms in Texas were shut down due to a massive winter storm that dried up the state’s electricity grid.
Ethan Vera, co-founder of Luxor Tech, a US-based crypto mining company, said some mining farms ceased operations due to power outages, while others sold the electricity back to the grid for a premium. Most mining farms are offline, Vera said.
Due to the Texas outage, the hashrate generated from Luxor’s mining pool was reduced by 40%. Most of the hash rate for the entire mining pool comes from US mining farms, Vera said.
While it’s unclear exactly what percent of the hash rate in the global mining pool comes from Texas-based facilities, some of the largest bitcoin mining companies like Bitmain and Layer 1 operate in Texas due to the state’s cheap electricity.
Crypto mining giant Bitmain built one of the world’s largest bitcoin mines in Rockdale, East Texas, in 2019. Layer1 Technologies, a Peter Thiel-backed crypto mining company, started operating bitcoin factories in West Texas in early 2020. The public bitcoin mining company Argo Blockchain (ARB) announced last week that it plans to acquire land to build mining facilities in West Texas.
Some mining farms take advantage of this by selling their unused electricity to local residents.
“Some Bitcoin miners were able to benefit from reselling their unused energy back to the grid for a huge profit,” said JP Baric, CEO of MiningStore, a Texas-based crypto mining company. I said Sunday.
According to Dan Woodfin, senior director of the Texas Electrical Reliability Council (ERCOT), Texas’ power grid lost a small portion of its power generation last weekend because wind turbines were frozen and natural gas supplied to power plants became scarce.
Woodfin said that all types of energy sources, including nuclear power plants, coal power plants and thermal generators, fell off the grid due to the winter storm on Sunday, according to a report published in the Austin American Statesman.
About 30 gigawatts of energy is offline, 26 gigawatts of which comes from thermal energy and the rest from wind sources, according to TechCrunch.
The impact of extreme weather on bitcoin mining facilities goes beyond the Lone Star State. Mining farms in Kentucky were also adversely affected by the storms.