The Bitcoin network’s hashrate has fallen by around 25% in recent days amid calls for reductions from the Texas network regulator following a recent cold snap, with the US state now established as a global hub for the sector.
Data from MiningPoolStats and Blockchain.com show global hashrate estimates dropped from around 600 EH/s on Friday to 450 EH/s on Tuesday, coinciding with the Jan. 14-17 weather warning issued by ERCOT in due to the extreme cold throughout the region. . ERCOT, the Electric Reliability Council of Texas, serves as the grid regulator for most of the state.
ERCOT’s warning was followed by official calls for conservation on Sunday, Monday and Tuesday. “Operating reserves are expected to be low tomorrow morning due to continued freezing temperatures, record demand and unusually low wind. We ask Texas businesses and residents to limit their electricity use if it is safe to do so,” ERCOT said. Yesterday’s last reduction request ended at 9:00 am CT.
The hashrate reduction means that more than four gigawatts of power capacity were reduced during the period, TheMinerMag previously reported.
Miners targeting Foundry USA Pool, one of the largest mining pool operators by hashrate, appear to be responsible for about half the decline, falling from around 155 EH/s on Friday to 77 EH/s yesterday, before recovering, according to Mining Pool Statistics.
Users of Luxor Mining Pool were also affected by the cold wave. “Luxor’s mining partners have significantly scaled back their operations, shutting down machines to return allocated power to the grid over the past few days,” Ethan Vera, chief operating officer of Luxor Technology, told The Block.
History of hashrate. Image: MiningPoolStats.
Texas emerges as Bitcoin mining hub following China crackdown
China-based Bitcoin miners previously led the world in terms of total hashrate. That dominance collapsed in 2021 following shutdown orders from regulators as the country launched a crackdown on the sector.
Texas emerged as an alternative hub, with miners arguing at the time that mining is just as good for Texas as Texas is for miners since the industry’s flexibility of electricity use can strengthen the grid state electricity, reducing demand during peaks and injecting it during troughs.
Companies like Marathon Digital, Riot Platforms and Iris Energy are among those that have increased the concentration of Bitcoin mining facilities in Texas in recent years, attracted by cheap electricity, grid incentives and the state’s deregulated energy market. A Foundry report from September says US-based Bitcoin miners using its pool in Texas account for 28.5% of its hashrate in the country, the largest share among states by some margin and more than twice compared to 8.4% in 2021.
Texas Bitcoin miners are also no strangers to reduction calls in the state. In August, Riot Platforms received a new monthly record in energy and demand response credits of $31.7 million, managed by ERCOT, after reducing energy consumption by more than 95% during the heat wave summer. In the same month, Iris Energy also received $2.3 million in energy credits, primarily through voluntary curtailment at its Childress, Texas, site.
