The state of Texas is facing a severe power crisis as extreme weather conditions have disrupted the electricity supply and demand. The Biden Administration declared a power emergency in the state this week, urging residents to conserve energy and avoid using non-essential appliances. The power grid operator, ERCOT, has warned of possible blackouts and rolling outages as the demand for electricity exceeds the available generation capacity.
The power crisis has affected millions of Texans, who are struggling to cope with high temperatures and humidity. Some have reported power outages lasting for hours, while others have faced soaring electricity bills due to the surge pricing. The situation has also impacted the health care system, which is already strained by the COVID-19 pandemic. Hospitals have reported difficulties in maintaining their equipment and cooling their patients.
Bitcoin miners forced to shut down operations
The power crisis has also hit hard the Bitcoin mining industry, which relies heavily on electricity to run its machines and validate transactions on the blockchain. Texas is one of the top destinations for Bitcoin miners in the world, thanks to its low energy costs and relatively loose regulation. The state hosts some of the biggest Bitcoin mining facilities, such as Riot and Marathon Digital, as well as AntPool, the second largest Bitcoin mining pool in the world.
However, due to the power emergency, many Bitcoin miners have been forced to shut down their operations and comply with the rules set by ERCOT. Lee Bratcher, president of the Texas Blockchain Council, said, “We have consistently been seeing 90% plus curtailment of Bitcoin mining each day this week that power conditions tightened. The power that is not off is most power to the office buildings and backup systems that are on site and not the machines themselves.”
Bitcoin price recovery delayed by miner selling
The shutdown of Bitcoin mining in Texas could have a negative impact on the Bitcoin price, which has been hovering around $25,500 to $26,000 for almost three weeks now with no sign of recovery. The reduced mining activity could affect the hash rate, which is a measure of the computing power of the network. A lower hash rate could make the network less secure and more vulnerable to attacks.
Moreover, the power crisis could force some miners to sell their Bitcoin holdings to pay their bills and cover their losses. This could increase the selling pressure on the market and drive the price down further. Miner selling has been associated with sudden price crashes in the past, such as the one that occurred at the end of August.
Bitcoin mining is an energy-intensive process that consumes a lot of electricity and generates a lot of heat. The need for a reliable and cheap power supply has led many miners to seek locations that offer favorable conditions, such as Texas. However, the recent power crisis has exposed the vulnerability of this industry to external factors that could disrupt its operations and profitability.