2021 has been a good year for bitcoin Mining in America as new talent – and equipment – floods the market, but some states are definitely more appealing destinations than others.
The latest data from the Global Energy Institute show that the average price of electricity is lowest in states including Texas and Washington, which really jibs with the fact that both states are becoming increasingly hot destinations for minting new digital coins.
Although the cost of electricity is not everything when you decide where to set up the store, it certainly goes a long way.
Large-scale miners compete in a low-margin industry, where their only variable cost is usually energy, so they are stimulated to migrate to the world’s cheapest energy sources.
The price of power in the United States varies.
In California and Connecticut, you will pay anywhere from 18 to 19 cents per kilowatt hour, while in Texas, Wyoming, Washington and Kentucky you will pay less than half of that, according to Global Energy Institute, which publishes an annual electricity price map of the country, using the latest full year with data available from the US Energy Information Administration.
The institute warnshowever, that “while the energy mix available in a state will play a major role in government electricity prices, energy-restrictive policies in some states seem to artificially raise prices, making electricity prices much higher for consumers and businesses.”
In the end, it is the bitcoin miners who care most about finding cheap power sources.
This is part of why the United States is particularly appealing to prospective miners, as the country is home to some of the cheapest energy sources on the planet, many of which tend to be renewable.
Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings, expects that most new miners moving to North America will be powered by renewable energy or gas that will be offset by renewable energy credits.
“Mining is price sensitive to search for the cheapest power and the cheapest energy tends to be renewable, because if you burn fossil fuels … it has extraction, processing and transportation costs,” said Blockstream CEO Adam Sade Back.
Washington State is a mecca for hydropower mining, while Texas’ share of renewable energy is growing over time, with 20% of the power comes from wind from 2019.
However, electricity costs are not everything. Friendly decision makers and adequate infrastructure are also key factors.
It has a deregulated electricity network that allows customers to choose between power suppliers, and it is crucial that its political leaders are pro-crypto dream relationships for a miner looking for a friendly welcome and cheap energy sources.
“You will see a dramatic change in the next few months,” said bitcoin mining engineer Brandon Arvanaghi. “We have governors like Greg Abbott in Texas who promote mining. It will be a real industry in the United States, which will be incredible.”
The United States has also spent years investing in encryption infrastructure, long before it was popular.
When bitcoin crashed in late 2017 and the broader market entered a multi-year cryptocurrency winter, there was not much demand for large bitcoin farms. US mining operators saw its opening and jumped at the chance to invest cheap money to build the mining ecosystem in the states.
“The big listed miners were able to raise capital to make big purchases,” said Mike Colyer, CEO of the digital currency company Foundry, which helped bring more than $ 300 million in mining equipment to North America.
Companies such as North American cryptomination operator Core Scientific continued to build value space throughout the depth of the period so that they had the capacity to connect new tools, according to Colyer. Core, which has operations in North Dakota, North Carolina, Georgia and Kentucky, is one of the largest providers of blockchain infrastructure and web hosting in North America.