Today, roughly 90% of the total bitcoin supply has been mined. As bitcoin enters the last 10% of its mining, it has become increasingly difficult and costly to mine 1 BTC. While this problem is problematic, it has created a massive opportunity for bitcoin mining firms to explore and grow. But one US State is set to become the biggest and hottest spot for bitcoin mining.
Texas, the second-largest state in the US, has shown great potential in becoming the state where every bitcoin mining firm will want to relocate. A series of events over the 4 months has resulted in Texas being the favorable location for bitcoin mining. Despite several challenges -notably regulatory concerns- the state might make history as the world’s biggest bitcoin mining shareholder.
But Texas has not arrived here purely by its efforts or by chance. The events that will put the state in a lofty position are a mixture of efforts from two different authorities. But while the first authority’s efforts harmed bitcoin mining, the second’s were geared towards making bitcoin mining easier and safer.
China’s Ban, Texas Gain
In September, Chinese authorities culminated their 5-month anti-crypto policies in a country-wide crypto ban and crackdown on bitcoin mining. The impact was immediate; while the crypto market dipped, crypto firms -both exchanges and mining companies- massively exited China. Within a few weeks, bitcoin miners moved from China to the US, Canada, Kazakhstan, Iran, and Russia.
Before the crackdown, Chinese bitcoin miners had over 60% of the bitcoin mining cap. But that fell quickly to zero within two months. Recently, a report from China stated that there is no ongoing bitcoin mining activity in some Chinese provinces. Others have been warned to rescue it until they stop gradually.
In the US, Texas is one of the States that have received a massive influx of bitcoin miners. The reasons are not far-fetched; Texas has a crypto-friendly policy and has the best electricity tariff rates. Bitcoin mining is also supported by a prominent Texas Senator, Ted Cruz. Cruz has repeatedly called for Texas to utilize its gas flares to generate electricity for bitcoin mining.
Electricity Consumption May Rise
One of the reasons China crackdown on bitcoin mining was its massive electricity consumption. According to a report from the Yunnan province, it saved 2 billion kilowatt-hours of electricity after ending all bitcoin mining activities. In Iran and Kazakhstan, recent power outages have emphasized the impact of bitcoin mining on electricity.
Bitcoin mining is expected to increase Texas’ electricity consumption by 5,000 MW in 2022. That will be a positive sign that the mining hash rate has increased, but it would also challenge Texas’ government. Several solutions, such as the one suggested by Cruz, would have to be explored. The state’s government is, however, confident of making necessary changes.
On overcoming those challenges, Texas will become the bitcoin mining hotspot in the world. The bitcoin mining hash rate is moving towards a new all-time high. In 2022, bitcoin mining will become more efficient with new mining equipment being manufactured.