Texas Cold Snap Causes Significant Decline in Bitcoin Hash Rate, Disrupts Mining Operations
Summary:
An unexpected cold spell in Texas is suspected to have caused a 34% decrease in Bitcoin's (BTC) hash rate, prompting some mining operations to be suspended due to strain on the state's power grid. Despite this, fewer significant disruptions to the Texas power grid were reported than in 2021 during similar conditions. Several mining companies, who contribute to nearly 29% of the Bitcoin hash rate in the United States, have joined an ERCOT-led program offering compensation for adjusting their load on the grid during high demand periods. Looking forward, ERCOT anticipates grid conditions to return to normal shortly.
An unanticipated cold snap in Texas appears to have caused an approximately 34% decrease in Bitcoin's (BTC) hash rate, as some mining operations had to be suspended due to strain on the state's power grid. This started on January 14th when most regions of Texas experienced sub-zero temperatures, a rare occurrence since the major frost in February 2023. As per YCharts data, the whole BTC network's hash rate declined from over 629 exahashes per second (EH/s) on January 11th to about 415 EH/s on January 15th - a 34% decrease. The analysis platform reported an increase in hash rate to over 454 EH/s on January 16th as temperatures in Austin briefly warmed just over freezing point during daylight.
Faulty gas infrastructure in Texas was largely to blame for the power outages in 2021, which were held responsible for nearly 240 fatalities. Now, with assistance from wind power, it seems the grid is maintaining stability this week despite windchill temperatures descending below freezing point.
Data sourced from Foundry's data pool shows that Texas comprises nearly 29% of the Bitcoin hash rate in the United States. After China's clampdown on BTC miners and cryptocurrency, several mining companies shifted their operations to Texas. Companies like Marathon Digital, Riot Platforms, Bitdeer, and Core Scientific have facilities based in Texas.
In contrast to 2021, where record-low temperatures and a surprise winter storm triggered widespread power failures during a period of intense ice and heavy snowfall, the Texas power grid has seen fewer severe disruptions. Numerous mining companies have joined a program led by the Electric Reliability Council of Texas (ERCOT), which provides compensation for modifying their load on the state's power grid during times of high demand.
"Bitcoin miners such as Marathon Digital act as a technological solution for the energy sector," stated Charlie Schumacher, Vice President of Corporate Communications at Marathon Digital, on January 17. "In Texas, these miners provide a base load that can be decreased within minutes to allocate energy for others during emergencies, which is precisely what has occurred in recent days."
In Texas, high demand typically translates to extreme temperatures during summer and winter, which could result in damage to the state's energy infrastructure. Argo Blockchain experienced a significant reduction in activity due to winter conditions at its Texas Helios Facility in December 2022, mining approximately 25% fewer Bitcoins than the previous month. As of January 17, ERCOT informed that they foresee "grid conditions to return to normal" from midnight onwards.
Published At
1/18/2024 12:38:40 AM
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