Texas Emerges as Leader in Bitcoin Mining, Hosting 28.5% of US Hash Rate
Texas has taken the lead in Bitcoin mining, surpassing other US states and accounting for an impressive 28.5% of the nation’s hash rate. This estimate, provided by Foundry, the world’s largest Bitcoin mining pool, highlights the rapid growth and dominance of Texas in the mining industry. In 2021, Texas held a hash rate share of 8.4%, indicating a substantial increase over the past two years.
Previously, states like New York and Georgia held higher hash rate shares, with figures of 9.5% and 34.2% respectively. However, both states have witnessed a decline in their mining activities. Georgia’s decrease can be attributed to the absence of a large miner from the 2021 sample, while Texas’s rise has played a significant role in reshaping the landscape. New York’s mining growth, on the other hand, has stagnated due to regulations against fossil fuel-powered miners.
Other states such as Nebraska, North Carolina, Kentucky, Oklahoma, and Washington have also experienced significant drops in their hash rate shares, further consolidating Texas’s position as the leading state for Bitcoin mining.
One of the factors that make mining particularly attractive in Texas is the government’s incentives to stabilize the electricity grid. During periods of high demand, the grid operator, ERCOT, requests miners to halt operations to prioritize power supply to residential areas. Miners are then compensated for their participation. These incentives have undoubtedly contributed to Texas’s rapid growth in the mining industry.
Riot, a prominent mining company, has harnessed the power credits provided by the state to lower its mining costs significantly. Riot CEO Jason Les has expressed excitement about the expansion plans in Navarro and Milam counties. Additionally, Foundry has also expanded its operations by acquiring mining sites from the bankruptcy estate of Compute North, a collapsed mining firm.
While Foundry’s data indicates a 28.5% hash rate share for Texas, the University of Cambridge’s mining map, last updated in January 2022, shows Texas accounting for only 11.2% of the US hash rate. The University plans to update its map in the coming year, ensuring a substantial sample size and avoiding overrepresentation by any single mining pool.
Alexander Neumueller, the Cambridge Research Lead for Digital Assets Climate Impact, has stated that the increase in Texas’s share comes as no surprise, given his conversations with industry stakeholders. He expects significant changes in the mining landscape, particularly regarding China and Kazakhstan.
Texas’s emergence as the leading state for Bitcoin mining highlights its favorable regulatory environment and the incentives provided to miners. With its abundant supply of renewable energy and supportive government policies, Texas is poised to remain a key player in the cryptocurrency mining industry, attracting miners from around the globe. As the mining landscape continues to evolve, Texas’s dominance in this sector is likely to grow even further.
