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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.

Texas senator Ted Cruz added more Bitcoin during the dip; profits at a minimum of $2000

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Texas Senator Ted Cruz a.k.a R-TX on January 25, 2022, bought bitcoin valued between $15,001 and $50,000 taking advantage of the recent dip. This was revealed in a financial disclosure dated February 4 with the US Senate. 

The purchase was enabled using River brokerage. On the day of the purchase, the bitcoin price was exchanging hands under $37,000. His profit on the transaction is anywhere between $2,000 – $6,850, considering he hasn’t sold his bitcoins and incurred any short-term capital gains taxes on the same.

Cruz has shown his support for crypto assets in recent months, even went on to introduce a resolution for merchants on Capitol Hill to accept cryptocurrency payments, and pushed for amended language to address industry concerns in the fiercely-debated infrastructure bill.

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Drilling deeper, Cruz’s announcement of an amendment to remove the language in the bill is aimed at tightening reporting requirements for digital asset brokers. Some crypto industry players voiced concern over the definition of the broker as they claim it to be too generic, and could encompass any kind of entity.

That being said, Cruz’s state of Texas has also emerged as a major bitcoin mining hub in the U.S as miners reaped profits taking advantage of the state’s deregulated energy market in the backdrop of China’s crackdown on crypto mining last year. However, a powerful storm threatens to cut off the state’s vulnerable power grid.

Texas Governor Greg Abbot reportedly urged crypto miners to shut down their operations in order to prevent electricity loss and the repeat of a previous disaster that left a hundred dead last year amid the multiday outage. At least 10 million Texans were affected by the deep freeze that devastated large swaths of the state.

Texas crypto mining rigs lends a helping hand to brace a major winter storm

In the face of a major winter oncoming storm descending on Texas, crypto miners are scaling down operations to help ease the burden on the state’s crisis plagued power grid, as reported by CNBC.

Following that, Riot Blockchain, one of the biggest publicly traded crypto mining companies in America, began shutting down power to its Rockdale mine last Tuesday, a process it said occurs in phases. 

Several other crypto miners across Texas have followed suit involuntarily reducing energy consumption in the wake of the arctic blast. 

Texas crypto miners shut down their operations as winter storm approaches

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As a severe winter storm looms on Texas, crypto miners are turning down operations to help lessen the pressure on the state’s already troubled electrical infrastructure.

One of the biggest publicly listed crypto mining businesses in America, Riot Blockchain, began turning down electricity to its Rockdale mine on Tuesday.

“As the storm has persisted, we have continued to cut our power use by 98 percent to 99 percent . So today, we are just consuming 1 percent to 2 percent of power.”

Trystine Payfer, Riot’s head of communications.

Payfer told CNBC Riot will continue to regulate its power use as needed until there is “no significant stress on the ERCOT grid.”

Crypto miners join hands to help Texas

Several other crypto miners across Texas have followed suit in voluntarily limiting energy use in the run-up to the cold blast.

The CEO of Rhodium Enterprises, a fully integrated bitcoin miner employing liquid-cooled infrastructure, tweeted that Texas-based bitcoin miners were reducing their load starting Wednesday to “help offer surplus power reserves” for the storm.

“We are happy to assist stabilize the grid and help our fellow Texans remain warm,” wrote Rhodium CEO Nathan Nichols.

Other crypto miners stated they would respond in real-time to the requirements of the grid. The grid is named ERCOT, short for the Electric Reliability Council of Texas, the body entrusted with running it. To work successfully, ERCOT requires a perfect balance between supply and demand.

Texas Governor Greg Abbott recently requested locally-based Bitcoin miners to assist the state get through winter by shutting off their workstations.

Reports have surfaced saying Abbott made the request at a meeting last October with leaders from Texas’ expanding Bitcoin mining community.

How Texas is coping with the winter storm?

In brief, Texas officials have developed several initiatives to preserve electricity energy for coping with the oncoming rainstorm. The essential components of those systems include incentives to significant power users crypto miners for restricting their activities during the most significant power demand hours.

According to Payfer, Riot and other miners may reap various benefits by helping ERCOT simplify power grid operations during storms. The rewards might include participation in the load management programs or any other service and fixed lower power prices agreements for an extended period.

Texas residents express interest in crypto as a payment method

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Following El Salvador’s footsteps, several governments were seen trying to accommodate crypto into their system. Texas, a state in the United States of America is the latest to express interest in crypto. However, the residents of the state were seen pushing for crypto payments.

Just as the world was traversing into the digital world, digital asset payments were seen thriving. While the value of crypto surged, the demand for it followed suit. The crypto industry noticed a drastic growth from its nascent stage to its fully-fledged current rate of adoption. Trying to keep up with the trend and reap the benefits of the crypto-verse, several governments across the globe were seen adopting cryptocurrencies.

As per a recent poll reported by Newsweek, it was noted that an array of people from Texas were interested in bringing crypto into the region. In a survey with 9,700 voters over various states of the United States from 20 to 22 August in California and 20 to 24 August in nine other states. About 37% of the residents from Texas were noted voting to make crypto legal. However, 42% of the crowd wanted crypto-friendly legislation.

This could further mean that about 10 million of the existing 29 million population of Texas were seen favoring the adoption of crypto in the region.

Texas to go crypto-friendly?

Redfield & Wilton Strategies, a UK-based platform, carried out a survey in light of the state’s efforts to recognize cryptocurrencies. While some parts of the US still remain hostile towards the emergence of crypto, regions like Wyoming and Texas seem to be driving the crypto bandwagon.

Additionally, several politicians have started to express support for crypto, particularly during campaigns. While some of them have a genuine interest in bringing crypto into the system, a few others could be using it to lure voters. Louisa Idel, the head of insights at Redfield & Wilton spoke about the same and said,

“If a party wants to catch these receptive voters, it should act swiftly—not only to beat the other party to the punch but also to preempt legislation that would prove difficult to reverse if enacted.”

Texas-state banks can now store Bitcoin and other cryptocurrencies

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The pace of adoption of the crypto-verse seemed to be taking a notable plunge. Texas’s latest move is proof enough of the same.

While the world still battles the deadly Covid-19 virus, Bitcoin [BTC] emerged as a promising digital asset. The king coin’s five-fold growth paved the way to many countries to embrace the crypto industry. Even though the asset has plummeted down to $36K from $64K, the demand for BTC persists.

While El Salvador made sure to give Bitcoin a legal status in the country, other regions of the world have their own way of showing support for the king coin. A Texas state regulator was lauded for its recent crypto-friendly move.

Texas state banks can provide virtual currency custody services

The Texas Department of Banking issued a recent notice highlighting that banks in the state would now be able to hold cryptocurrencies like Bitcoin and several others. State-owned banks were given a green signal in terms of providing services that included virtual currencies to their customers. However, these banks were obligated to maintain protocols that efficiently managed the risks that surrounded the crypto-verse.

While noting that Texas-state chartered banks have rendered custody services for several other assets, the regulator wrote,

“While custody and safekeeping of virtual currencies will necessarily differ from that associated with more traditional assets, the Texas Department of Banking believes that the authority to provide these services with respect to virtual currencies already exists pursuant to Texas Finance Code § 32.001.”

Furthermore, the notice entailed details pertaining to the crypto industry and its functions. The latest law seemed to be the result of the recent bill to recognize cryptocurrencies that were passed in the Texas House of Representatives.

Additionally, the regulator even allowed the banks to join hands with third-party service providers. The regulator further added,

“As with the method of custody services, several secure storage options are available to the bank, each of which has distinctive characteristics pertaining to level of security and accessibility. The bank will have to determine which storage option best fits the circumstances.”

Texas Government Brings Down Over 15 Fraudulent Investment Platforms

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The crypto industry has been catching the attention of the entire globe. With the value of Bitcoin reaching new heights, people have been making attempts to garner some easy money, not in the most honest way. Several governments have been trying to bring down illicit operations and Texas seems to be the latest to conduct a “series of sweeping actions.”

Texas State Securities Board Slaps Several Crypto Platforms With Cease And Desist Order

In an elaborate article titled, “Commissioner Announces Series of Sweeping Actions Against Fifteen Online Crypto, Forex and Binary Options Investment Scammers” published by the Texas State Securities Board, the agency revealed that several investment platforms were brought down for carrying out fraudulent investment schemes. The post penned down by Commissioner Travis J. Iles pointed out that over fifteen platforms including forex, binary options as well as crypto were formulating deceiving projects in the state. Three cease and desist orders were issued against the platforms. The first cease and desist order was issued against James Blundell, an individual who defrauded people through ten platforms that offered crypto investment opportunities.

Blundell, a resident of Seabrook Texas created social media profiles and lured people to invest in his platforms. His scammy platforms included, Proactive Expert Trading, Reliable Miners, BitcoinFX Options, Sure Trade Earnings, CryptoTradeFXWay, Proactive ExpertTrade, ReliableFX Internal Trade, MaxFX Internal Trade, AntPoolTop Mining and ExpertTrades247. The investment plans on these websites ranged from $10K all the way to $1,000,000 with a profit of 80% per hour for 24-hours.

Another order was issued against Binary Trade Forex, FX Trades, and IQTrade. These websites promised its users a daily return of 30% to 120%. The plans on this website ranged from $500 to $10,000.

Speaking about the same and alerting the investors, the Commissioner further wrote,

“Investors can’t afford to take everything at face value when transacting over the internet. They need to thoroughly investigate before they invest– because on the internet, anyone can fake a trading license, publish phony testimonials or falsely claim to be regulated by an offshore agency.”

Investors were urged by the Commissioner to steer clear of scammy operations. The Texas State Securities Board Commissioner also gave its citizens a means of contact in case they came across such schemes or platforms. The post read,

“Investors can begin the due diligence process by contacting the Texas State Securities Board by telephone at 512-305-8392 or by email at enforceinfo@ssb.texas.gov.”

Alabama and Texas Bans South African Firms After Crypto Credit Card Scam

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Securities watchdogs in both Alabama and Texas issued a cease and desist order following a crypto credit card scam promoted by South African firms. Accordance to a joint order issued by both the Texas State Securities Board (TSSB) and the Alabama Securities Commission (ASC), companies such as the South African Liquidity Gold Trust, Liquidity Gold Solution and Liquidity Global Card Solution and an individual named Lance Angus Jerrard have issued prohibition orders.

As per reports, the sanctioned firms and Jerrard advertised a fraudulent debit card, dubbed Liquidity Card on social networks and a radio station in Austin, Texas. The perpetrators wrongfully stated that there is a secure way for people to make money while staying at home amid the COVID-19 disaster.

Crypto credit card scam breakdown

The firms allegedly utilized their advertisements to claim that Liquid Card could help investors evade taxes by transacting in stablecoins such as TUSD, USDC and PAX coin. The fraudsters were to recruit and convince new users to commit a minimum of $1,150 in one portion or more of 8,400 parts in the crypto credit card scam. Furthermore, the investors claim that the debit card functions as a traditional debit card.

The project, which was scheduled to start in October, aimed to register over 8 million new users in 36 months. According to the joint order release, the firms mentioned above offer investors a written 100 percent cash back guarantee, which the order terms as fraudulent. Notably, the watchdogs also noted that they had disguised vital information; the risks posed by the project to potential cardholders, and how they make money from the capital employed.

Involved parties have 30 days to issue a response

According to the prohibition order, all the liquidity companies listed are under no obligation to sell securities in Texas or Alabama. Moreover, the firms allegedly used fake pictures to lure investors into the crypto credit card scam. The authorities have given all the involved firms a 30-days grace period to respond to the cease and desist order.