Recent data reveals that Texas now leads the United States’ Bitcoin mining industry, taking over 28% of the nation’s total hashrate. This remarkable shift has solidified the country’s position as a global Bitcoin mining leader, particularly after China’s ban on the practice in 2021.
The Shift in Hashrate Dominance
Following China’s crackdown on Bitcoin mining in 2021, the United States has emerged as the new global powerhouse in this industry. Once dominated by the giant Asian nation, which held a whopping 44% of the global hashrate, the landscape has already shifted dramatically in favor of the West.
The result of the Bitcoin mining ban for the Chinese saw the share of the country plummet to 21%, while the US swiftly rose to the top with almost 38% of the global hashrate.
Texas Takes the Highest National Hashrate
In the United States, the distribution of Bitcoin mining activity is far from uniform. Back in 2021, Texas held only 8.5% of the national hashrate, trailing behind New York State (9.5%), Kentucky (12%), and Georgia (34%).
However, with the said Chinese ban in place, Texas experienced a meteoric rise in Bitcoin mining. Today, Texas dominates the landscape with a commanding 28.5% share, closely trailed by Georgia and New York according to CNBC, citing data sourced from Foundry.
What Sets Texas Apart as a Bitcoin Mining Hub?
A significant advantage lies in the availability of low-cost electricity generated from waste sources. Most of these reportedly come from flare gas.
The state has harnessed these resources to fuel its mining operations, making it the third-largest state in the world by hashrate, trailing only China and Kazakhstan.
Bitcoin Halving Seen to Favor the State
CNBC interviewed Kevin Zhang, a Bitcoin mining veteran, who highlighted the upcoming halving event as a crucial test for miners. In this event, he warned that their earnings would likely be halved overnight.
He said that while some may not survive this challenge, miners in Texas are expected to persevere. The Lone Star State, in particular, boasts a favorable regulatory environment for miners alongside Wyoming, though the latter lags due to limited resources.
Mass Migration of Bitcoin Miners
With these advantages in mind, there has been a noticeable migration of US miners to Texas, primarily driven by the cost-effectiveness of mining Bitcoin in the state. Local authorities have also shown strong support for this industry, which entices them to move to the area.
Meanwhile, the state’s energy grid operator, ERCOT, ensures stable energy prices while providing incentives for miners to utilize excess energy efficiently.
Mining as Energy Utilization
Bitcoin mining in Texas aligns perfectly with the utilization of energy resources that would otherwise go to waste. This is primarily displayed by its utilization of flare gas, a natural byproduct of oil fields, often discarded through burning.
Furthermore, it enables the monetization of surplus electricity, which cannot be efficiently stored on a large scale. By repurposing this excess energy for mining, it becomes a valuable and profitable resource.
Texas has risen to prominence as the leading Bitcoin mining state in the United States, contributing significantly to the nation’s growing dominance in a global scale. With its abundant and cost-effective energy sources, it has established itself as a formidable player in the arena, offering a model for the efficient use of energy resources in this burgeoning sector.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.