Why China's bitcoin miners are moving to Texas BBC - https://tinyurl.com/yk5vjyws China's ban on cryptocurrency mining has forced bitcoin entrepreneurs to flee overseas. Many are heading to Texas, which is quickly becoming the next global cryptocurrency capital. When China announced a crackdown on bitcoin mining and trading in May, Kevin Pan, CEO of Chinese cryptocurrency mining company Poolin, got on a flight the next day to leave the country. "We decided to move out, once [and] for all. [We'll] never come back again," Mr Pan told the BBC. Headquartered in Hong Kong, Poolin is the second largest bitcoin mining network in the world, with most of its operations in mainland China. The country was home to around 70% of global bitcoin mining power, until the clampdown sent the price of bitcoin into a tailspin and caught miners off guard. Now China's "bitcoin refugees" are urgently scrambling to find a new home, whether in neighbouring Kazakhstan, Russia or North America, because for bitcoin miners, time is literally money. "We had to find a new location for the [bitcoin mining] machines," Poolin's vice-president Alejandro De La Torres said. "Because every minute that the machine is not on, it's not making money." In what some call the "Great Mining Migration," the Poolin executives are among the many bitcoin miners who have recently landed in a place reputed as part of America's wild wild west: Austin, Texas. Bitcoins are a digital currency with no physical form - they exist and are exchanged only online. They are created when a computer 'mines' the money by solving a complex set of maths problems and that is how bitcoin 'miners' who run the computers earn the currency. This takes a lot of energy. As a new form of money that transcends national boundaries, there is also much confusion and potential to run afoul of government rules - so two things bitcoin entrepreneurs value are cheap electricity and a relaxed regulatory environment. The Lone Star State fits the bill to a tee. New frontier for bitcoin mining For Mr Pan, Texas felt like home almost instantly. Days after his arrival, he was gifted an AR-15 rifle, which he says he may use to "hunt hogs from a helicopter" one day. While the shooting ranges and Texas barbeque provide for welcome entertainment, legal protection for business is the major attraction for the bitcoin miners. "What happened to us in China won't happen in the US," Mr De La Torre says. Governor of Texas Greg Abbott has been a vocal supporter for cryptocurrency. "It's happening! Texas will be the crypto leader," he tweeted in June. In the same month, the Lone Star State became the second US state after Wyoming to recognise blockchain and cryptocurrency in its commercial law, paving the way for crypto businesses to operate in the state. Many Chinese bitcoin companies have looked to Texas for stability and opportunity. Shenzhen-based firm BIT Mining has planned to invest $26 million to build a data centre in the state, while Beijing-based Bitmain is expanding its facility in Rockdale, Texas. This small town with around 5,600 residents once housed one of the world's largest aluminium plants, and now it's emerging as the next global hub for bitcoin mining. There might be another underlying connection between the industry and the state, as De La Torre says that bitcoiners and Texans share the same values. "Texans take their freedom and rights very seriously, and so do we bitcoiners." Experts believe China's bitcoin crackdown was motivated by having greater control over the financial markets, and it may become a boon for America. "The migration benefits the US in terms of talent acquisition and furthering the innovation ecosystem," says Kevin Desouza, a business professor at the Queensland University of Technology who has done research on China's digital currency policy. In return, the bitcoin miners get access to a thriving and innovative community, as well as more diverse sources of capital, according to Prof Desouza. Energy and political risks Other than a stable regulatory environment, the energy-hungry industry is hunting for cheap electricity in Texas. Texas has some of the cheapest energy prices in the world, due to its deregulated power grid. Consumers enjoy more choices of electricity providers, which encourage providers to lower prices to stay competitive. During peaks of electricity demand, bitcoin farms can even sell unused power back to the grid. Although El Salvador is set to become the first country to adopt bitcoin as a national currency, bitcoin miners prefer the US because of its well-developed electrical infrastructure, says Mr De La Torre. But some analysts warn that the "Great Mining Migration" may lead to serious repercussions, as cities and towns struggle to meet the huge energy appetite. In February, blackouts following a deadly snowstorm left millions of homes and businesses in Texas without power for days. More than 200 people died. During the power outage, bitcoin farms were compensated to stay offline. The increased scrutiny of Chinese companies in America may also lead to more attention on these mining newcomers. Texas recently passed a law that prevents "hostile foreign actors" from accessing critical infrastructure, including its power grid. The new law was reportedly prompted by a Chinese billionaire's plan to build a wind farm in southwest Texas. Critics allege that the project could be used to hack into the Texas energy grid and to gather intelligence from a nearby US military base. Prof Desouza says that while access to electricity grids is unlikely to be an issue for bitcoin miners in the short term, political risk will continue to evolve. The bitcoin miners do miss something in China - cheap labour cost and speedy construction. According to Mr Pan, while a new bitcoin farm takes up to five months to build in China, it could take as long as 18 months in Texas. Global shipping prices have also skyrocketed during the pandemic, making it significantly more expensive to ship mining machines from China to the US. Despite the costly and time-consuming efforts, Mr Pan says his company is committed to settle in Texas, "It's a free land, and a lot of bitcoiners are here," he says, "so we feel: 'whoa, family reunion.'"
Just thinking out loud in response to the article you posted. I am not asking you directly: Greg Abbott can't even provide electricity to Texas during a winter snow storm. How will he accommodate electricity hungry cryptocurrency miners?
repost. Also, Texas has been historically hostile to ICO's. We know how they "support" blockchain technology.
This is one interesting quote from the article - "In February, blackouts following a deadly snowstorm left millions of homes and businesses in Texas without power for days. More than 200 people died. During the power outage, bitcoin farms were compensated to stay offline." I wonder how much they were compensated to stay offline -- and what exactly was the source of the funding.
Isn't it funny how money talks? The same Chinese they love to hate are now welcomed with open arms. I don't know much about crypto farms, but I don't expect them to be labor intensive once built. We know however that they're energy intensive... who else is suddenly interested in providing power and management in TX? Yes, Tesla... who is also big on crypto? Yes, Musk...
tax payers? Bitcoin mining is like any other operation out there. If you're using grid power to pump oil or run a paper mill for instance, and are asked to shut down, that down time is going to cost you money. Moreso when your reliance on energy use is 100%. Now, I don't really agree that tax payers should foot the bill, but I don't see why the same courtesy shouldn't be extended to all businesses. I'd rather there was an insurance model in place tbh.
It's not a courtesy but most likely a negotiated agreement to settle there. There's very little tax paying labor in such operations so I can't imagine how much TX benefits from these energy sucking farms when government has a deal to reimburse the company when power fails. Maybe TX gets a BTC cut?
Bitcoin mining is saving the environment by using flare gas for energy source https://www.cnbc.com/2021/09/04/bitcoin-miners-oil-and-gas-execs-talk-about-natural-gas-mining.html --------------------- Bitcoin miners care most about finding cheap sources of electricity, so Texas – with its crypto-friendly politicians, deregulated power grid, and crucially, abundance of inexpensive power sources – is a virtually perfect fit. The union becomes even more harmonious when miners connect their rigs to otherwise stranded energy, like natural gas going to waste on oil fields across Texas. “This is Texas, boys. We got what you need, so come on down,” said Haby. “We are sitting on the energy capital of the world.” ... But if it’s 20 miles from a pipeline, things start to get more complicated. More often than not, the gas well won’t be big enough to warrant the time and expense of building an entirely new pipeline. If a driller can’t immediately find a way to sell the stash of natural gas, most look to dispose of it on site. One method is to vent it, which releases methane directly into the air – a poor choice for the environment, as its greenhouse effects are shown to be much stronger than carbon dioxide.
Why won't they set up solar power for their mining operations? I've read land is dirt cheap in most of Texas (compared to New York) and it's sunny too.