2021 was a great year for bitcoin mining in the United States as new talent and equipment flooded the market, but some states are arguably more lucrative destinations than others.
According to the latest data from the Global Energy Institute, states such as Texas and Washington have the lowest average electricity prices, and both states are undoubtedly popular destinations for minting new digital coins. Not there.
The cost of electricity isn’t everything when deciding where to set up a store, but it certainly helps a lot.
Large miners compete in low-margin industries. In this industry, variable costs are usually just energy, which leads us to move to the cheapest power sources in the world.
Electricity prices vary across the United States.
California and Connecticut will pay 18-19 cents per kilowatt hour, while Texas, Wyoming, Washington and Kentucky will pay less than half that amount. The Global Energy Institute publishes a national annual electricity rate map using the latest year-round data available from the US Energy Information Administration.
However, the institute noted, “While the energy mix available in the state plays a major role in state electricity prices, some state energy restriction policies artificially inflate prices and consumer electricity. This serves to make the price too high. And it’s a business.”
Ultimately, bitcoin miners care most about finding cheap electricity sources.
This proves that the United States is particularly attractive to future miners, given that the United States is home to some of the cheapest energy sources on the planet, many of which are renewable. part of the reason.
Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings, expects most of the new miners moving to North America to be powered by gas offset by renewable energy, or renewable energy credits.
“Since the mining industry is price sensitive, find the lowest cost electricity to be renewable, because if you are burning fossil fuels, so are the costs of extraction, refining and transportation.” Blockstream CEO Adam That’s what he said. Buck said.
Washington is a mecca for hydroelectric mining farms, but Texas’ share in renewable energy has been increasing over time, with 20% of its electricity coming from wind power in 2019.
Electricity is not everything. Adaptive policy makers and adequate infrastructure are also important factors.
With a deregulated power grid, customers can choose from electricity providers. And crucially, its political leaders support cryptocurrencies. A dream state for miners looking for one-of-a-kind welcoming and cheap energy sources.
“We will see dramatic changes in the coming months,” said bitcoin mining engineer Brandon Alvanagi. “There’s a governor running the mining industry in Texas like Greg Abbott. It would be a real industry in the United States and would be incredible.”
The United States has also invested in crypto infrastructure long before it became widespread.
When bitcoin crashed in late 2017 and the broader markets entered a multi-year crypto winter, there was not much demand for large bitcoin farms. Seeing its opening, American miners jumped at the opportunity to deploy cheap money to build the American mining ecosystem.
“Big listed miners were able to raise money to make big purchases,” said Foundry, a digital currency company that helped bring in more than $300 million in mining equipment to North America. CEO Mike Collier said.
According to Collier, companies such as North American crypto mining operator Core Scientific continued to create hosting space throughout the period to allow new gear to be added. With operations in North Dakota, North Carolina, Georgia, and Kentucky, Core is one of the largest blockchain infrastructure and custody providers in North America.