Riot Blockchain to Close Bitcoin-Mining Operation in Texas to Save Electricity For Winter Storm

cryptocurrency riot blockchain texasbased whinstone

Instead, he argues, “the intermittency of renewables should be met with demand response from societally-beneficial loads, like industrial facilities, commercial buildings, and residential air conditioners — or energy storage.” For years, ERCOT has struggled with fluctuating energy prices and sporadic service, which is why it strikes deals with flexible energy buyers, like crypto miners. Through established “demand response” programs, ERCOT will actually pay major industrial users to cut power.

cryptocurrency riot blockchain texasbased whinstone

The plan to use crypto mines as giant batteries is controversial, to say the least. Ed Hirs, an energy fellow at the University of Houston, claims the battery analogy is “nonsense” because miners don’t store and release energy, but rather only promise to stop consuming when it’s urgently needed elsewhere. And he disputes the idea that crypto mining will bring additional energy generation to the grid, which he describes as misdirection designed to distract from the price increases people will incur due to an overall rise in energy demand.

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At almost 13 EH/s by year-end, Riot should rank third in computing power behind Core Scientific, projected at 15 EH/s, and a hair short of Marathon Digital at an estimated 13.3 EH/s. Previously, the facility mainly housed third-party miners, who pay handsomely for the Harris team to provide housing, electricity, maintenance, and all other services. While Whinstone still serves outside customers, Riot has shifted the main focus to generating Bitcoin for its own account. In January, Riot companywide mined 458 Bitcoin valued at over $20 million, the vast bulk at Whinstone, and it’s on track to more than double that output by late 2022. Compute North, which hosts bitcoin miners in its data centers, told CoinDesk that it is also closely eyeing the storm. “We are prepared to respond [in] real time to curtail our operations in order to support ERCOT, grid stability and power demand,” Compute North Director of Energy Peter Liska said.

Bitcoin miners are helping the Texas grid brace for winter storm impact – CNBC

Bitcoin miners are helping the Texas grid brace for winter storm impact.

Posted: Thu, 03 Feb 2022 08:00:00 GMT [source]

Earlier this spring, Beijing cracked down on its domestic crypto mining industry. Exiled miners have since begun to seek refuge in places like the United States, which recently became the top mining destination on the planet. In addition, miners can be flexible in the face of fluctuating power supplies and prices. Unlike an aluminum smelter or just about any other business, miners can deal with an outage without suffering major financial damage. Riot also reported that it sold 275 BTC in July, netting the firm roughly $5.6 million.

Drowning In Complexity: Bitcoin Miners Submerged By Soaring Mining Difficulty

He’s even persuaded craggy restaurant owners to use real ground beef in their burgers, and fancy them up New Orleans–style. After a long day installing computers or ordering transformers, he rides his gravel bike at night, followed by a buddy driving behind him to illuminate the bumpy road. He’s thrilled that Brett Boren, who runs his favorite eatery, Brett’s Backyard Bar-B-Que is running for mayor. Bitcoin is helping swell the town’s tax receipts by 25% a month, he says, and providing the funds for new lights at the baseball field.

The company reported Q1 results earlier this week, with revenue reaching $23.2 million, a 342.1% uptick from the $5.2 million generated in the previous quarter. On Wednesday, Feb. 2, the energy use was cut by “roughly” 98%, according to the report. Riot initially signed a deal with Bitmain in last August to invest $17.7 million in 8,000 units of Bitmain’s Antminer S19 Pro — scheduled to be fully delivered by this month. As for the recently ordered 42,000 units, delivery is not expected to start until next year.

Major Texas Bitcoin Miners Close Operations Ahead of Winter Storm

But the rapid growth of crypto mining in Texas is raising concerns about the massive amounts of energy the operations require and the greenhouse gases they produce. Bitcoin miners have been flocking to Texas ever since 2020, due to the business-friendly environment and above all, the state’s cheap electricity. Some miners get incentives from the state to return back their power usage. This means, that Bitcoin mining provides the economic incentive for more grid capacity than is typically necessary. We are seeking a Software Engineer to add to our team of software engineers that can contribute to our DevOps infrastructure. You will be writing infrastructure as code and contributing to our CI/CD pipelines to support multiple applications within production and testing environments.

“We make sure they’re not using their own money to support our project,” he notes. “We buy materials for them all the time that they normally have to buy for themselves. Our greatest skill is sending money to contractors as fast as we can.” For Harris, the payoff is that during the pandemic shortages, loyal suppliers tended to fill Whinstone’s orders first, a benefit that continues to this day. Since there are risks in shutting down the servers aside from profit loss, the grid operator will pay the crypto miners for conserving power. Before that, Chad Harris, the CEO of Whinstone, and Riot boss Jason Les spoke to Governor Greg Abbott about this preparation. They said that they were shutting down the Bitcoin-mining operations for the upcoming winter storm.

Boosting the bitcoin balance sheet

There are now ten industrial-scale mining facilities operating in Texas, the largest of which by power capacity (at 750 megawatts) is operated by Riot and situated on a 100-acre plot in the town of Rockdale. And the Electric Reliability Council of Texas (ERCOT), the grid operator, says there is a long queue of companies awaiting approval for new mining installations. Demand for energy in Texas is set to skyrocket as a result of Abbott’s plan. Miners in the state are currently using around 2 gigawatts (GW) of energy, with peak capacity for the state topping out at 80 GW. By 2026 it’s estimated that Texas bitcoin miners will draw as much as 29 GW—four times as much as the whole of New York City. In February 2021, when 246 people in the US state of Texas lost their lives during a powerful storm and its ensuing blackout, the finger of blame was pointed at the state’s faltering electricity grid.

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The Internal Auditor is a high visibility role where you will be interacting with all levels of personnel within the company and will report to the Director of SOX Compliance. This role includes documenting and evaluating the design and operating effectiveness of business processes. We are looking to add an Internal Auditor to our growing Compliance Department. Harris deployed two strategies that helped him skirt the snarls that slowed so many big infrastructure projects after COVID-19 struck in March of 2020. The first is using his own electricians, engineers, and other workers to build equipment and perform complicated tasks that are usually outsourced. Whinstone fashioned its own “interconnect,” a silvery web of wiring that links the 138,000-volt grid outside its property to its own substation.

The event is expected to have a significant impact on the prices of Litecoin and other cryptocurrencies. Litecoin prices surged as news emerged that the Litecoin Foundation has announced that the Litecoin halving is scheduled to take place on May 14, 2020. The Ethereum network is set to undergo a major upgrade on 21 July, with some speculating that the price of Ethereum could see a significant increase as a result. Bitcoin futures rose more than 1% on Monday to around $6,300 as cryptocurrency became more mainstream. “Transformers you can get in about 12 weeks if you were hot to try and had cash, but you’ve still got to get the power off of the lines,” said King. Harris estimates that on day one, they had 300% more capacity than Bitdeer.

  • Riot Platforms, previously known as Riot Blockchain, a crypto mining company, has initiated legal proceedings against Rhodium Enterprises, a Bitcoin miner based in Texas.
  • It also appears that at Bitcoin’s current price of around $40,000, Whinstone is extremely lucrative.
  • Northern Data recognized that the New Orleans founders were as essential as steel and transformers to building the giant project, and left the full team in place.

Three weeks later, a retinue of 15 managers from Japanese company swooped down on the team’s homegrown Bitcoin farm in New Orleans. “They said, ‘We’ve been to 11 countries, and this is by far the best solution we’ve seen to expelling hot air from miners,’” recalls Harris. Aiden flew to New Orleans that very day and quickly assembled a business plan for the Japanese client––in exchange for the team to pay off his student loans. In mid-November of 2018, the Harris team clinched a deal to provide the warehousing, power, and services for the Japanese company’s first Bitcoin mining operation in the U.S.

Two of the biggest bitcoin mining companies in the world are battling it out in a Texas town of 5,600 people

Mayor King says today’s arrangement between miners and ERCOT is pretty simple and mutually beneficial. Not only do miners make use of power otherwise going to waste, they also function as “interruptible load,” meaning they are able to turn off all of their machines with a few seconds’ notice when the grid is in a pinch and needs the extra power. The state also infamously suffered blackouts earlier this year after severe winter storms. Rockdale was once home to the largest aluminum plant in the world, run by Alcoa. Because miners at scale compete in a low-margin industry where energy is their main variable cost, they have reason to migrate to the world’s cheapest sources of power. The competition among power providers in Texas is a good thing for miners, since it typically translates to lower rates.

  • The miners, many of whom flocked to the state in recent months to take advantage of Texas’s low energy costs, say they will reduce their energy consumption to help avoid a power failure similar to the one Texas experienced in 2021.
  • To ensure our website performs well for all users, the SEC monitors the frequency of requests for SEC.gov content to ensure automated searches do not impact the ability of others to access SEC.gov content.
  • Various industries include financial services, trade finance, supply chain, enterprise tech, consumer and retail, and healthcare.
  • Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.
  • The Company has Bitcoin mining data center operations in central Texas, Bitcoin mining operations in central Texas, and electrical switchgear engineering and fabrication operations in Denver, Colorado.
  • It’s possible that the extra efficiency provided by immersion cooling could lift Whinstone’s output to as much as 10% of the world’s Bitcoin production.

It ensures such benefits as low-cost energy and maximum production margins, as well as electricity supply with the flexibility to respond rapidly to supply and demand events in the power market. Bitcoin hit a new all-time high on Tuesday, as the digital currency surged past $6,300 for the first time. The latest milestone came after reports that the beth coin price number of daily transactions on the bitcoin network had surpassed 100,000 for the first time. Transformers take the power from a substation and convert it to a lower voltage that can then be used to power bitcoin miners. King has already fielded close to 40 inquiries from mining companies keen to set up shop there, many of whom are Chinese miners.

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