Texas has become the go-to state for those looking to mine bitcoin and cryptocurrencies. Several miners who were shut out of their native China have gone to places like Texas to set up new shops and take advantage of its low energy prices.
Texas Has Seen Its Mining Business Expand Heavily
While this has been great for the economy in Texas, some are worried about the amount of electricity being used and the pressures this is putting on its grid. Lee Bratcher – president of the Texas Blockchain Council – says that there are seven large mining firms in Texas along with 20 small ones. He says that while several of these companies have been around for years, there are many others that have popped up only recently. These firms have increased energy usage in the state tenfold.
For the most part, Bratcher thinks this is a good thing and likely to help the Lone Star State establish itself as a leading tech hub. In an interview, he joked:
It seems a little counterintuitive at first.
While he feels there is positivity with Texas’ situation, there are others – such as Alex de Vries, a researcher at the School of Business and Economics at Vrije University Amsterdam – who think the state is going to suffer. He comments that bitcoin mining is an unsustainable practice, and thus he feels Texas may wind up paying in the future. He says:
This is a huge risk in Texas as well because the grid isn’t known for its stability.
He is also against the process of mining given that he doesn’t feel the computers solving the equations that ultimately add crypto units to the blockchain do a fully accurate job due to the code behind bitcoin being open source. He commented:
They’re just playing a game of guessing the number.
Hagen Kim – a professor of finance at Texas A&M University – is against bitcoin for other reasons. He explained in a recent statement that bitcoin goes against the U.S. dollar and sets up competition for what is a sovereign form of fiat. He believes that the U.S. dollar could wind up losing its stability in the coming future, and he’s convinced bitcoin will at least be partially to blame. He says:
You’re essentially creating a potential U.S. dollar to compete with the U.S. dollar.
There May Be Some Danger
De Vries further stated that he doesn’t feel Texas is all ramped up about crypto or the growing finance or tech industries like it claims to be. Rather, he believes Texas is largely fueled by greed and is luring bitcoin miners to its turf to build up its annual revenue, though the state is not thinking about the long-term consequences. He mentioned:
The priority wasn’t getting renewable energy. It was getting business up and running again.