Movement of Bitcoin mining operations around the world has been very active in the past several months, with more and more countries trying to get as much of the total Bitcoin hashrate share as they can. Following the crackdown by the Chinese government, China’s share of the global hashrate dropped from 44% in May of 2021 to Zero (0%). It’s important to note that while it was recorded to have dropped to zero, there are likely still a number of miners operating within China, using VPNs to hide their location. While it may not be exactly zero, it is likely very close as most of the hashrate has shown movement to the United States, Russia, and Kazakhstan.
Bitcoin Mining in the United States
As of July 2021, The Cambridge Bitcoin Electricity Consumption Index (CBECI) has determined that the U.S. holds 35.4% of the hashrate share, up over 30% from the previous year. It’s likely that this number is also higher today, three months later, as miners continue to move operations to the U.S. for its affordable electricity and an overall enthusiasm towards digital currency. In the remainder of this article, we will illustrate some of the most promising Bitcoin states and share why Texas is set to be the central hub for Bitcoin mining moving forward.
While New York is an innovative hub for many industries, it is currently a questionable state for Bitcoin as Democrats run the show and have already tried to halt mining once before. Grid power ranges from $0.038 to $0.045/kWh, but a large focus in the state is on natural gas. Gas prices have steadily increased, driving hosting prices in New York to as high as $0.06/kWh, with anticipation that these prices will only go up as the winter season approaches. Still, New York is currently the state with the highest hashrate according to Foundry USA, the largest mining pool in North America. This is due to the low carbon intensity of mining in New York as a result of its use of hydro power.
Florida, on the other hand, wants to become the front-running Bitcoin mining state, however the climate unfortunately does not seem to allow for it. Miami specifically is very interested in Bitcoin mining, but the heat and humidity are terrible for equipment degradation. The main opportunity lies in immersion cooling, but this requires 300% more capital expenditure compared to air cooling. An opportunity lies in nuclear power in Florida which could sell miners energy at $0.02 to $0.025/kWh, but the FL governor would still need to subsidize the CapEx investment in order to attract miners. Although Florida may not be the ideal location for Bitcoin mining, the high interest speaks towards the acceptance and enthusiasm towards Bitcoin as adoption continues to expand.
Pennsylvania, Georgia and Wyoming
Pennsylvania is among the more attractive states for mining, with great weather for air-cooled containers and multiple effective power sources. The grid offers power at $0.035 to $0.042/kWh in some areas, while natural gas sites are offering power from natural wells as low as $0.01/kWh. Unfortunately, the CapEx for generators puts the total power cost at around $0.05/kWh. If generator companies find a way to bring the costs down, PA will look even better for mining. Furthermore, two nuclear power plants in Pennsylvania have formed ventures with crypto companies to provide power, which could bring another, carbon-free and even cheaper option to miners.
Meanwhile, Georgia has allocated 199MW of power to miners at a cost of $0.042 to $0.047/kWh, paired with fairly high temperatures which makes it slightly less attractive compared to PA, although still a good option. Wyoming is also looking to get miners into the state, and Wattum had the opportunity to meet Senator Cynthia Lummis out of Wyoming at the recent Texas Blockchain Summit. We look forward to hearing more from Senator Lummis about the future of her state’s mining operations.
Kentucky, Montana and the Rest of the New American Dream
Other notable states that have upped their Bitcoin mining operations include Kentucky, with 119MW of power currently offered, and Montana with 108MW. With such a significant number of states already offering more than 100MW of Bitcoin mining power, the near-future for mining in the United States continues to look brighter, and more competitive.
Finally, we look at what is likely to be the largest hub for Bitcoin mining in the United States, and possibly even the world.
Texas is the Future of Bitcoin Mining
Texas was the clear highlight at this year’s Texas Blockchain Summit, and it wasn’t just because the event was hosted in the southern state. Led by a great discussion between Senator Ted Cruz and Bitcoin educator and author Jimmy Song, the overall positive sentiment of mining in Texas seems to be rising day by day. As guests of the Summit, it was amazing to see several hundred entrepreneurs and investors listening and reacting with excitement towards Senator Cruz’s speech. Cruz is a huge supporter of the Bitcoin industry as a whole, and it seems as though every mayor in every city in Texas is looking to build out additional mining infrastructure.
The huge appeal of Texas as a mining hub is due to several important factors, including the welcoming nature of the lawmakers in the state. Aside from this, Texas is home to a massive amount of power, with a deregulated power grid. This deregulated grid is able to offer power ranging from $0.015 to $0.025/kWh, making it one of the most affordable places in the world to mine Bitcoin. There’s so much power in Texas that it could power the entire Bitcoin network alone, with a combination of mainly natural gas and renewable energy. As of today, there is already 5000MW committed to mining in Texas, which we expect to be up and running within the next two years.
There is also huge potential in Texas for the use of excess energy that is clean and renewable. With an abundance of natural gas, wind power, and growing solar power technology, there is no shortage of green energy for miners. The ability to set up mining centers virtually anywhere in the state is opening up many opportunities for the further growth of renewables, as they can be built far away from the grid and still be put to use. Moreover, Bitcoin mining has the potential to capitalize on the huge amount of wasted energy from natural gas flares. Generators can be set up near oil fields that receive the wasted natural gas from oil drilling, and use it to power Bitcoin miners. This gas would otherwise be wasted, and it is said this practice could slash emissions from gas flaring by up to 63%. Not only is this a carbon positive operation, but it does not take any power that would normally be used by the grid. The amazing opportunities for clean, affordable energy in Texas have miners around the world fighting for a spot in the southern state.
Wattum is Saddling Up in Texas
Wattum has been keen on mining in Texas for some time now, and has committed to building a 100MW site as well as an on-the-ground team in order to service the north, east, and western regions of the state. The new repair center set to open up will also be able to service all local miners in the area, with the capacity to repair up to 200 miners per day. Setting our presence in Texas will allow us to work directly with miners, while facilitating local pickup and delivery to any point in the state. Stay tuned on Wattum Insider to stay up-to-date on our future developments in Texas and the rest of the United States.
The temperature in Texas has been a point of speculation, as it can get quite hot. Wattum is in the process of building a special Evaporative Cooling Wall (ECW) for our Wattum containers that will knock the temperature down by up to 10 degrees, keeping the highest point at or below 95°F. We have also tested 360 Whatsminer ASIC’s at 105°F, and they were able to continue working through peak temperatures, which are seen only 2 months out of the year.
Reliability has also been a point of speculation, as it has been advertised that power may be shut down when the grid needs power (as it did during the recent freeze over in Texas). While this was likely a once-in-a-lifetime event, miners were also compensated for their willingness to revert power back to the grid. Furthermore, we’ve seen 97% uptime in most areas of Texas, which is as reliable as anywhere else in the world.
With many groups and companies looking to build sites ranging from 50MW to 300MW in Texas, as well as Kazakhstan miners looking to build at over 2000MW, it’s important to start building early to secure a spot. Wattum Energy can assist with all aspects of the build out process, including locating a site, negotiating a power contract, building a site and loading it with miners, and even managing your site. We’re the all-in-one partner you can rely on, always.