• Bitcoin miners leave China
• Texas as a new crypto Eldorado
• Favorable electricity prices and a friendly political climate beckon
For a long time, the People’s Republic of China was the dream land for crypto enthusiasts who had dedicated themselves to mining Bitcoin. The country in the middle convinced in particular with the low electricity costs, since enormous amounts of energy are required for mining. A lack of regulation of cryptocurrencies and cheap labor also ensured that the majority of Bitcoin miners stayed in China for years. But that’s over now.
China scares away bitcoin miners
The Chinese government has now set its sights on the original cyber motto Bitcoin and, after numerous previous announcements, banned the mining of Bitcoin and activities in connection with the coin. As a result, numerous Chinese Bitcoin farms were turned off, which was promptly reflected in the Bitcoin hashrate. A disaster for companies whose business model consists solely of mining the valuable coins.
advertisement
Buying Bitcoin is quite complicated and time-consuming.
»Here you can easily buy and sell Bitcoin
The new promised crypto land
An alternative had to be found quickly. Due to the large amounts of energy that mining requires, one of the most important criteria for the new crypto Eldorado is cheap energy. In addition, a benevolent political attitude towards cryptocurrencies is also required. The Bitcoin miners have now found both basic requirements – in the US state of Texas.
Cheap electricity costs
In this respect, Texas is first and foremost convincing with its low electricity costs. The power grid in the state is deregulated, which means that there are numerous different electricity providers who offer electricity at lower prices due to increased competition. In addition, it is possible to conclude multi-year contracts with the providers, whereby a fixed amount of electricity is determined. So the same amount is paid over the years. In addition, the purchased electricity can be sold back to the electricity network operator if it is not needed to the same extent. A good starting point for prospectors that also offers planning security.
Welcome with open arms
In addition to these positive basic requirements, the Texan Governor Greg Abbott has also taken up the topic of blockchain and cryptocurrencies and wants to make the Lone Star State the next crypto magnet, as he said on Twitter.
It’s happening!
Texas will be the crypto leader.
Cryptocurrency is now coming to Texas grocery stores.
H-E-B is putting cryptocurrency kiosks into some Texas grocery stores.#cryptocurrency @HAVE https://t.co/e4CNsSbd0s via @chron
– Greg Abbott (@GregAbbott_TX) June 19, 2021
Abbott only signed a law in June that simplifies crypto investments in the state in order to attract more crypto companies and investors into the country. With success, as the increasing number of Bitcoin farms in the state shows.
On the other hand, Chinese companies in particular are more mistrusted in the US, which, according to Kevin Desouza of the Queensland University of Technology, should not be underestimated as a political risk, as he revealed to the BBC.
Win-win situation for energy companies
Incidentally, it is not just the Bitcoin companies that can benefit from the conditions in Texas. This is a win-win situation, especially for Texan oil and gas companies. For example, oil producers often have the problem that when they open up new oil wells, they unintentionally come across natural gas deposits, but then they do not know what to do with the escaping gas. In contrast to crude oil, which can be transported away by truck, a pipeline is required for the onward transport of natural gas. However, it is not worthwhile to create a separate pipeline for every type of outflowing natural gas so that the oil– Companies are often forced to ignite the escaping gas in order to get rid of it.
In the meantime, however, there are companies, such as Upstream Data, who specialize in using such unforeseen deposits as an energy source for mobile Bitcoin mining stations. For Bitcoin farms, this opens up another cheap source of electricity, while a problem turns out to be another source of income for energy companies.
Future prospects uncertain
Even if it seems that Texas is turning out to be the new Bitcoin Eldorado, it remains to be seen how long this trend will last. As Dickens County’s highest elected official told The Guardian, “We’re seeing movement right now, we’re seeing a lot of interest. We understand why that interest is there. But we just don’t know what the future of bitcoin mining is like I think the biggest concern right now is how long this industry will hold out “.
Finanzen.ch editors
– .
