(rejected) Winter Storm Forces Bitcoin Mining Farms to Go Offline Across Texas

Editor's note: The main source is from Coindesk.

A massive winter storm has adversely affected the operations of Bitcoin mining farms in Texas. The storm has drained the power grid of Texas state. The incident has caused Bitcoin mining farms to go offline.

Ethan Vera, the co-founder of Luxos Tech US-based cryptocurrency mining firm, said that some mining farms have stopped their operations because of the power outage while others are taking advantage of the situation not only by selling unused electricity to local residents but also to the state’s power grid.

 JP Baric, the CEO of MiningStore Texas-based crypto mining firm, said: “Some Bitcoin miners were able to capitalize on selling their unused energy back to the grid for a huge profit.”

The Texas power outage has caused a reduction of hashrate generated from Luxor’s mining pool by 40%. Vera revealed that the majority of hashrate for the entire mining pool comes from the U.S mining farms.

Although the exact amount of hashrate coming from Texas-based mining farms in the global mining pool is unknown, some of the largest Bitcoin mining firms like Layer 1 Technologies cryptocurrency mining firm and Bitmain Technologies crypto mining company have operations in Texas due to the cheap electricity of the state.

In 2019, Bitmain China-based crypto mining company established one of the world’s largest Bitcoin mines in Rockdale, East Texas. In early 2020, Layer 1 Technologies – Peter Thiel-backed cryptocurrency mining firm – began its Bitcoin factories in West Texas. Last week, Argo Blockchain (ARB) publicly traded Bitcoin mining firm announced its plans to acquire land to construct mining facilities in West Texas.

Dan Woodfin, senior director of The Electric Reliability Council of Texas (ERCOT) said that over the previous weakened of February 5, Texas’ power grid already lost a small amount of energy production because natural gas available to electric plants became scarce and wind turbines were frozen.  

By Sunday, February 14, the winter storm caused all types of energy sources like thermal generators, coal plants, and nuclear plants to fall off the grid. About 30 gigawatts worth of energy has gone offline, with 26 gigawatts of that energy coming from thermal energy while the remaining coming from wind sources.

How Severe Weather Threatens Crypto Mining

Concerns have been raised among professionals about the impact of extreme weather conditions that negatively affect the way cryptocurrency miners create new coins and process transactions.

In the recent past, flooding in Sichuan province in China ruined hardware of crypto mining farms and adversely hit Bitcoin hashrate. Miners were forced to grab what equipment they could carry as river banks collapsed. The Sichuan province has become a concentrated area of crypto mining activities because of the abundant amount and cheap electricity tariffs.

Chinese miners generate about 50%-70% of the world’s Bitcoins. Such flooding incidents expose how vulnerable Bitcoin is to disruptions caused by extreme weather conditions. Morgan Stanly analyst estimated that the flooding in China could affect 8%-10% of global Bitcoin mining activity.