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Here’s why Bitcoin miners from Texas are turning off rigs

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Texas bitcoin miners are being forced to cease operations as a result of the escalating global energy crisis and the continuous collapse of the cryptocurrency market. Texas miners have been forced to suspend operations as a result of an impending heat wave that is expected to strain the state’s power grid after the state experienced the effects of early crypto winter.

Bloomberg reports that as Texas’ energy problem worsens, the majority of bitcoin mining farms have stopped operations. According to Lee Bratcher, the president of the Texas Blockchain Association,

“There are over 1,000 megawatts worth of Bitcoin mining load that responded to ERCOTs conservation request by turning off their machines to conserve energy for the grid. This represents nearly all industrial scale Bitcoin mining load in Texas and allows for over 1% of total grid capacity to be pushed back onto the grid for retail and commercial use”. 

Texas bitcoin miners have already given up their work to provide for the availability of surplus power reserves. Texas cryptocurrency miners announced in February of this year that they would significantly reduce their energy use in an effort to stabilize the grid during Winter Storm Landon.

Even Riot Blockchain, the biggest Bitcoin miner in the state, participated in the act by halting mining. Trystine Payfer, the head of communications for Riot, confirmed that the change was voluntary, noting,

“Whinstone began taking proactive measures to prepare for shutting down its mining operations in response to any demand surges in ERCOT [grid operator — Electric Reliability Council of Texas]”.

Bitcoin mining no longer seems to bring in profits

However, the continued downturn has prompted the involuntary shutdown of cryptocurrency mining rigs, whereas in Texas miners made the conscious decision to suspend operations because of the energy issue. An organization that offers computer power-sharing services, Bitdeer, recently published a report in which it noted that the values of old bitcoin mining equipment have dipped following the shutdown due to a lack of profitability.

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Additionally, the chart had started to indicate an inversion, according to data from BTC hash ribbons provided by Glassnode Studio. The Hash Ribbon basically functions as a market indicator, presuming that the world’s largest cryptocurrency often reaches a bottom when miners give up or when mining BTC becomes prohibitively expensive. Because of this, the hash rate for mining bitcoins has also stopped, proving that the miners’ revenues are straining the network.

Compass Mining, a Bitcoin Mining Firm Lays off 15% Employees

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Compass Mining made an announcement that it will lay off 15% of its workforce and decrease executives’ pay by up to 50%.

“Today, we have made the difficult decision to reduce the size of the Compass team by 15% and to implement significant compensation and spend reductions across the rest of the business.”

Thomas Heller and Paul Gosker, Compass co-founders and interim CEOs

They said that by making the modifications, the mining business will be able to “remain nimble” and well-positioned in what they refer to as a “changing industry.” They added, “We had to take a serious look at our [spending] and recalibrate for the future of the firm given the current market slump and projected future market conditions.

Compass will also assist the affected

Compass will offer “financial and non-financial help” to people impacted by the reduction, according to the statement.

“The changes we need to make don’t only impact our departing team members.” “Our senior employees and executive team have taken significant pay cuts of up to 50% as part of this process.”

The interim CEOs stated

The firm attributed the problems that led to today’s statement to the company’s fast development and the resulting operational, financial, and technological obstacles.

The company wrote in the statement that it started off with the simple idea that everyone should be able to mine bitcoin. The CEOs stated that since January 2021, it has sold over 30,000 machines worth more than half a billion dollars.

Amidst the difficult market conditions, several crypto firms have laid off several employees. Not just the crypto firm, but also investors are facing losses due to the prolonged bear market.

Eric Adams, NYC Mayor Is Against the Crypto Mining Ban Bill

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Mayor Eric Adams of New York City came out against a law that is just one step away from outright prohibiting Bitcoin mining in the state for another two years on Monday, June 13.

Proof of Work (PoW) crypto miners who do not use 100 percent renewable energy will face a two-year embargo under the measure. At the same time, the state of New York’s environmental office is looking at the environmental effects of mining. The bill was passed by the State Assembly on June 3 and is currently awaiting Governor Kathy Hochul’s signature before becoming law.

On Monday, Mayor Adams told Crain’s that he expects to ask Governor Hochul to veto the law because of the economic harm it will cause the people of the state.

Mayor Eric Adams has always stood for crypto

He now opposes the law, arguing that “we can’t continue to put restrictions in place” for miners who want to contribute to the state’s economy by spending “billions of dollars on cryptocurrency” in the state.

Supporters of the law, like the bill’s original sponsor, Assemblywoman Anne Kelles, are concerned that miners who utilize fossil fuel-burning power plants will put the state behind schedule in meeting its goal of lowering total carbon emissions by 85% by 2050.

To meet this aim, New York generates more than half of its electricity from renewable sources, closing down aging fossil-fuel power plants in the process.

On June 13, Assemblymember Kelles told the New York Post that Mayor Eric Adam and his support for miners surprised him and that he is effectively asking New York to “return to the stone age of bitcoin.” According to the Post, Mayor Eric Adams had already spoken out against miners in February.

New York is the fourth-largest producer of hash power in the United States, according to data gathered by the CBECI in December 2021. On June 3, industry experts warned CNBC that New York’s move to close mines might have a ripple effect throughout the industry.

According to the Bitcoin Mining Council, nearly half of the electricity used by Bitcoin miners comes from renewable sources. Miners try to reduce their reliance on fossil fuels, which necessitates the development of new technology. Mayor Eric Adams proposed setting timelines for New York-based miners to cut their emissions by particular dates. He said, “Give us a goal, not bans.”

New York Senate Passes a Bill to Ban Bitcoin Mining Citing Environmental Concerns

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The New York State Senate approved a bill targeting proof-of-work (PoW) bitcoin mining early Friday morning. The move is an approach to correct some of the environmental concerns surrounding cryptocurrencies.

The law, which was passed by the state Assembly last month, would put a two-year embargo on any upcoming carbon-based fuel-powered PoW mining firms in the Empire State.

Existing mining businesses or those in the process of renewing their permits, on the other hand, would be allowed to keep functioning. The bill received a 36-27 vote in the Senate.

According to the bill’s Democratic sponsor, Sen. Kevin Parker, there would be currently only one facility in operation that would be unaffected by the legislation. He also suggested that one pending application could be placed on the table.

New York state will study the environmental impacts of mining

The state will perform a study on the potential environmental implications of proof-of-work mining during the ban.

Many expected the bill to never come out of the committee when the Senate Environmental Conservation Committee failed to discuss it during its final meeting of the session, as it did last year’s version.

Sen. Todd Kaminsky, the committee’s chairman, expressed concern in May that the bill may have “deleterious economic repercussions for New York” if it is perceived as anti-crypto.

Because of the considerable low cost of hydroelectric energy, New York has long been eyed as a desirable location for crypto mining firms to set up plants. In the past years, mining companies have reused decommissioned coal power plants. One such facility, for example, was rebuilt by Greenidge Generation to run on natural gas.

Mining companies in New York have threatened to leave if the moratorium is implemented, noting the relative ease of doing business in more mining-friendly states like Texas.

China’s BSN Blockchain Ready For Global Expansion Despite ‘Challenges’

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China’s blockchain-based service network a.k.a BSN is eyeing its first major international expansion, according to a CNBC report. CEO Yifan revealed the firm’s plan to launch a project called BSN Spartan Network overseas sometime in August.

The Hong Kong-based firm boasts itself as a “one-stop-shop” for blockchain cloud applications. It aims to bridge different blockchains together to help businesses deploy the technology.

Even though Chinese President Xi Jinping has doubled down on Blockchain technology, elevating it to a national priority, it is strictly against any cryptocurrencies other than Digital Yuan.

Due to this, the Spartan Network will rely on half a dozen public blockchains that do not operate with cryptocurrencies. One of those will be a non-crypto version of the Ethereum blockchain when the project launches in August.

Yifan also confirmed that the Blockchain transactions fee will be paid in U.S. dollars rather than Ethereum’s related cryptocurrency called ether.

“The purpose of this is to drop the cost to use public chains to very minimal so that more traditional IT [information technology] systems and business systems can use public chains as part of their systems. That is why we are working with other major public chain protocols to convince them the mainstream is non-crypto public chains.”

More hurdles for BSN ahead

Being a blockchain firm and not dealing with cryptocurrencies will have its challenges. The CEO admitted that the initial years will be “difficult to push as most people in the blockchain industry only understand crypto.

Not only that, as it is backed by the Chinese government, foreign firms would likely be a bit hesitant to do business with the firm.

But Yifan begged to differ saying, “People will say BSN is from China, it is dangerous. Let me emphasize, BSN Spartan will be open source … we will not access anything from our end.”

“That is why when we a launch in August we will open-source immediately and we are working with a lot of western companies,” he added.

On the other hand, here is some good news for Bitcoiners.

China’s iron hold over Bitcoin miners from running operations in the country seems to be wavering. Data from the Cambridge Bitcoin Electricity Consumption Index [CBECI] showed that activity has picked up again and the nation is now the second-largest Bitcoin miner, after the US.

China Regains the Title of the 2nd Top Bitcoin Mining Hub

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According to recent research, China failed to implement its cryptocurrency prohibition last year, and the country has since resurfaced as one of the world’s main Bitcoin (BTC) mining hubs.

China became the second-largest Bitcoin hash rate supplier in January 2022, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI), months after local officials banned all crypto operations in the country.

According to data, Chinese bitcoin miners generated 21.1 percent of the entire global BTC mining hash rate distribution in early 2022, behind only the United States, which generated 37.8% of the total hash rate in January.

China once hailed the bitcoin mining industry

In 2019, China was the world’s largest Bitcoin mining country, accounting for more than 75% of worldwide BTC hash rate power. In July and August 2021, the hash rate decreased to 0% after a string of crypto mining farm closures around the country.

Despite the crypto ban in September 2021, the hash rate share climbed to 22.3 percent in that month and never went below 18 percent during the research period.

The new data, according to CBECI project leader Alexander Neumueller, is sufficient to prove that Bitcoin mining is still active in China.

Kazakhstan, the world’s third-largest BTC mining center, sees a modest reduction in hash rate share, according to the latest CBECI data. Kazakhstan’s contribution to the BTC hash rate fell from 18 percent in August to 13.2% in January.

Miners are currently mining up to 9% of the global BTC hash rate in unspecified places, according to CBECI statistics. With 6.5 percent and 4.7 percent, respectively, Canada and Russia are the next two largest mining centers.

Russia has dropped out of the top three nations in terms of BTC hash rate power, as well.

The most recent CBECI update provides more granular statistics on hashrate distribution in the state’s main Bitcoin mining market.

According to the figures, Georgia, Texas, and Kentucky have the greatest hash rate, accounting for 32 percent, 11.2 percent, and 10.9 percent, respectively. These three states collectively account for more than half of the overall hash rate in the US.

States like New York, California, North Carolina, and Washington, according to data, have major mining activity.

Latest Russian Sanctions Round by the US Goes for Bitcoin Mining Company

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The US Treasury Department stated on Wednesday that it had broadened its list of sanctions to include firms and persons who are suspected of assisting Russia in evading the impact of economic sanctions placed on the country.

Treasury sources said the agency is now focusing on Russian commercial bank Transkapitalbank and a network of more than 40 people, including tycoon Konstantin Malofeyev, who they say helped the Kremlin avoid a wave of economic sanctions.

The Biden administration also stated it is tightening down on enterprises that help Russia monetize its exports and other natural resources, such as Bitriver, that operate in the virtual currency mining sector.

US sanctions the first Russian Bitcoin mining company

Since the war on February 24, the United States has implemented multiple rounds of sanctions. Sanctions have been imposed on the country’s top banks and lenders, as well as cryptocurrency exchanges. “Having operated in the Russian Federation economy’s technology sector,” Bitriver was labeled.

Bitriver claims to be the world’s largest provider of environmentally-friendly cryptocurrency mining, having been created in 2017. It boasts a 100-megawatt renewable energy data center in Bratsk, Siberia, with 75,000 miners.

According to the Treasury Department, the company sold mining capacity to overseas clients, allowing Russia to “monetize its natural resources.” It went on to say:

“Russia has a comparative advantage in crypto mining due to energy resources and a cold climate. However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions.”

Anti-industry lawmakers in the United States have been increasing their rhetoric, believing that the country exploits crypto assets to dodge sanctions.

The Treasury Department defined crypto transactions to be “deceptive or organized transactions or deals” that might be exploited in sanctions evasion just days after the invasion in February.

The International Monetary Fund (IMF) echoed this opinion this week, warning that nations such as Russia and Iran may utilize cryptocurrencies to circumvent sanctions.

However, economists and industry experts have slammed the idea that the country will turn to crypto to dodge sanctions.

Louisiana Announces a Bill to Ease the Regulations on Bitcoin Mining

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A measure to de-regulate Bitcoin mining in Louisiana has been proposed by a state representative, Mark Wright. The proposed bill follows a few of the current law’s rules.

The Bitcoin mining sector has a lot of promise, but it also has a lot of drawbacks. The anti-crypto group has emphasized the industry’s enormous energy consumption as well as the fact that mining is not ecologically beneficial.

As a result, the government of Louisiana controlled Bitcoin mining and established limitations to keep things under check. Mark Wright, a State Representative, has just presented a measure to eliminate rules from the state’s power zones.

Louisiana’s “Deregulated Industrial Power Zones Act”

The “Deregulated Industrial Power Zones Act” will apply to “deregulated industrial power zones,” “governing authority,” and “state properties,” among other things.

It will allow government officials to petition for a power zone on a portion of the property, but they must host a public meeting within a fortnight after the hearing. During the meeting, the authority will be required to submit a complete analysis of the power zone’s impact.

The bill also stipulates that the updated or proposed law would follow the prior law with the exception of one provision.

It will be imposed on consumers that consume electricity for “commercial” or “industrial” purposes within the power zone. The user who does not purchase “electricity to replace electrical service capacity that existed previous to the formation of the power zone” will also be exempt.

Despite the fact that the proposed bill aims to loosen the constraints imposed by current legislation, it will not allow a utility producer to recoup expenses. It will guarantee that it does not significantly impact “service supplied to other retail customers.”

The adverse effects of Bitcoin mining

Bitcoin mining operations utilize roughly a hundred and twenty terawatt-hours of electricity each year, according to the Cambridge Bitcoin Electricity Consumption Index.

This is the total yearly home power usage in Sweden as a whole. According to Digiconomist, a single bitcoin transaction consumes the same energy as an ordinary American home in a month. It emits about a million times the amount of carbon dioxide as a single Visa transaction.

Does it make sense to devote such a massive quantity of power to a virtual currency at a time when the world badly needs to reduce carbon emissions? The response appears to be a resounding nay. Nonetheless, here we are.

Tesla, Block and Blockstream to build a 100% solar-powered Bitcoin Mining Rig

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Jack Dorsey’s Block, Digital asset infrastructure provider Blockstream, and Tesla unite together on a new venture to construct a solar- and battery-powered bitcoin mine in U.S’s second-largest state Texas. Speaking on the ambitious project, Adam Back, Blockstream co-founder, and CEO told that the mining facility is designed to be a 100% renewable energy bitcoin mining at scale.

“People like to debate about the different factors to do with bitcoin mining. We figured, let’s just prove it. Have an open dashboard so people can play along, maybe it can inform other players to participate,” Back said.

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Tesla, Block and Blockstream to build a 100% solar-powered Bitcoin Mining Rig 3

The mining facility will be powered by Tesla’s 3.8 megawatts solar PV array and 12 megawatt-hours Megapack. In addition to that, Blockstream would release a publicly accessible dashboard that will show real-time metrics of the project’s performance, including power output and total bitcoin mined.

The blockchain tech firm said the future version of the dashboard will include solar and storage performance data points. “This is a step to proving our thesis that bitcoin mining can fund zero-emission power infrastructure and build economic growth for the future,” Back said.

Blockstream aims to diversify crypto energy sources

The western part of Texas has abundant sources of renewable energy in the United States when combined with energy buyers like Bitcoin miners, can create financial opportunities. “Miners provide demand to these semi-stranded assets and make renewables in Texas economically viable,” according to Castle Island Venture’s Nick Carter.

Besides, Back said the off-grid mine is expected to be completed by the end of the year. If the project turns profitable in its pilot stage, the exec said, the firms would also bring wind power to the mix and scale the entire project.

“You’re making a sort of calculation of the optimal economic mix between solar and battery,” Back said. “There are 3.8 megawatts of solar and one megawatt of mining, so you can see you have to overprovision, because the peak solar input varies during the day and, of course, it’s not there at night.”

Blockstream said its ultimate goal is to strengthen the bitcoin network by diversifying the cryptocurrency’s energy sources.

Marathon Digital: HODL the coin

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Despite a 45-day delay in delivering its mining rigs through the first quarter, Marathon Digital (MARA), one of the biggest publicly traded bitcoin miners, is still on schedule to fulfill its hashrate forecast of 23.3 exahash per second (EH/s) by early 2023, the company stated in a statement Monday.

Marathon Digital’s mining fleet has produced 1,258.6 bitcoin so far this year, a 556 percent increase over the same period last year. The following is a breakdown of the Company’s bitcoin production by month:

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The Company last sold BTC on October 21, 2020, and has been “hodling” or hoarding all BTC created since then. As a result, Marathon now owns 9,373.6 BTC, including the 4,813 BTC it purchased in January 2021 at an average price of $31,168 per BTC. On April 1, 2022, the fair market value of one BTC was roughly $45,539, meaning that Marathon’s existing BTC holdings are worth around $427.7 million.

BTC production rises by 15% at Marathon Digital

Marathon’s CEO, Fred Thiel, stated that in the first quarter of 2022, the firm raised its bitcoin output by 15% over the previous quarter, producing a total of 1,259 bitcoins, despite the fact that the worldwide hash rate grew by around 17%. If the global hash rate had remained constant from the end of Q4 2021 to the end of Q4 2022, Marathon digital’s BTC production would have climbed 17 percent to 1,282 BTC. The company continues to hold, or HODL, all of its BTC, resulting in a total of 9,374 bitcoin, cementing our position as one of the greatest bitcoin holders among publicly traded companies.

The company blamed the delay on a longer-than-expected approval process for the power it needed to operate. Marathon CEO Fred Thiel, emphasizing that this process necessitated permits, which caused the deployment to be delayed said,

“Typically, power flows from power stations into the grid. However, to ensure we have a consistent power supply when the renewable sources are operating intermittently, we also needed power to flow from the grid back into the power station at scale.”

Marathon’s stock has plummeted 13% this year, while bitcoin has dropped 2.6 percent and mining peers Riot Blockchain (RIOT) and Core Scientific (CORZ) have plunged 9% and 16%, respectively. Marathon also acknowledged that, as Bloomberg previously reported, it is open to selling the company for the right price.