Winter storm knocks block reward mining farms offline in Texas

A rare winter storm has plunged the state of Texas into an energy crisis, leaving millions of its residents without power and many locally based block reward mining facilities struggling to operate.

CNN reported officials ordered rolling power blackouts across the state this week as a winter storm and frigid temperatures continue to cripple the state’s electricity grid. Frozen wind turbines and limited gas supplies have hampered energy production. 

The rotating outages might continue until the state’s weather emergency ends, according to the Electric Reliability Council of Texas (ERCOT). This influential grid operator controls about 90% of the state’s electric load, and they want to avert a broader collapse of the power grid. 

“Every grid operator and every electric company is fighting to restore power right now,” said ERCOT President and CEO Bill Magness. 

The disruptions have even caused problems at water treatment plants and prompted sharp criticism from state leaders. The Texas House speaker announced a legislative hearing to look into the widespread power failures. 

Texas Governor Greg Abbott called for an emergency reform of the Electric Reliability Council of Texas, stating it “has been anything but reliable over the past 48 hours.”

TechCrunch reported that roughly 30 gigawatts worth of energy is offline, with 26 gigawatts of that from thermal energy and the rest coming from wind sources.

The state’s struggle to generate enough power during these extreme weather conditions has caused most block reward mining farms to suspend operations. According to social media reports, some mining farms have even started selling electricity back to the grid at a premium. 

JP Baric, CEO of MiningStore, posted on Twitter: “Some Bitcoin miners were able to capitalize on selling their unused energy back to the grid for a huge profit” after “ERCOT hit upwards of $8000. / $9000 a MW”. 

Ethan Vera, a co-founder of Luxor Tech, was quoted by CoinDesk saying Luxor’s mining pool hashrate has decreased by 40% because of the Texas outage. 

While it is not clear what percentage of North American mining hashrate stems from Texas-based facilities, some of the largest BTC mining firms, such as Bitmain and Layer 1, have operations in Texas, drawn by the state’s cheap energy prices. 

See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.