New York and Texas Succeed In Attracting Bitcoin Miners

New York and Texas are winning the war to attract Bitcoin miners in the United States.

New data shows that, within the U.S., 19.9% of Bitcoin’s hash rate, the collective computing power of miners, is in New York state with 14% in Texas, according to Foundry USA, which is the biggest mining pool in North America and the fifth largest globally.

The states of Georgia and Kentucky are also developing Bitcoin mining hubs.

Many of the states ranking the highest for Bitcoin mining are epicenters of renewable energy, a fact which has already begun to recast the narrative among skeptics that Bitcoin is bad for the environment.

When Chinese authorities in Beijing kicked out cryptocurrency miners this past spring, about half of the Bitcoin network went dark. While the network itself didn’t skip a beat, the incident did set off the biggest migration of Bitcoin miners ever seen.

Because miners at scale compete in a low-margin industry, where their only variable cost is typically energy, they are incentivized to migrate to the world’s cheapest sources of power – which also tend to be renewable.

In New York, a third of its in-state power generation comes from renewables, according to the latest available data from the U.S. Energy Information Administration.

New York’s state assembly was weighing legislation this year to ban bitcoin mining for three years so it could run an environmental assessment to gauge its greenhouse gas emissions. Lawmakers have since largely walked it back.

Some of the biggest names in Bitcoin mining have set up shop in Texas, including Riot Blockchain, which has a 100-acre site in Rockdale, and Chinese miner Bitdeer, which is right down the road from Riot Blockchain.

The appeal of Texas comes down to a few fundamentals: Crypto-friendly lawmakers, a deregulated power grid with real-time spot pricing, and perhaps most importantly, access to significant excess energy, which is renewable, as well as stranded or flared natural gas.

Some Bitcoin miners plug straight into the grid in order to power their rigs. Texas’ grid has the cheapest utility-scale solar in the nation at 2.8 cents per kilowatt hour. The Texas grid is also rapidly adding wind and solar power.