Cold wave power outages in Texas, U.S. cause Bitcoin computing power to drop by 25%

Recently, there has been a significant decline in the computing power of the entire Bitcoin network. According to data from Blockchain.com, it dropped from about 600EH/s last Friday to 440EH/s yesterday, a drop of up to 25%. This decline is mainly due to the severe cold snap faced by Texas in the United States. The local power grid regulator ERCOT required power restrictions from the 14th to the 17th to cope with the possible surge in power demand caused by the extreme cold weather.

Texas power rationing is the main cause

According to a report by The Miner Mag, the recent decline in computing power is mainly caused by the Foundry USA Pool. The pool’s miner clients lost up to 75EH/s of computing power. Notably, as of September, more than 28% of the hashrate connected to the Foundry pool was located in Texas. Therefore, this decline in computing power is closely related to Texas’ power curtailment measures.

Foundry USA Pool and Ant Pool have seen significant hashrate declines since Sunday, with the two largest Bitcoin mining pools now accounting for only the entire network’s hashrate, according to Mining Pool Stats. less than 30%.

So far, as ERCOT announced the end of the weather warning early this morning, the computing power of Foundry USA Pool and Ant Mine Pool has rebounded to 146.54EH/s and 125EH/s respectively.

This incident highlights the impact of local policies on Bitcoin mining activities, and also demonstrates the unique advantage of Bitcoin mining activities, namely "the ability to facilitate interruption of operations." Marathon Digital is one of the three largest mining companies in North America. Charlie Schumacher, the company’s vice president of corporate communications, said that Bitcoin mining machines are in many ways a technical solution for the energy industry. In Texas, they provide a stable base load of energy and are able to adjust production within minutes to free up energy for other users in emergencies. This is exactly what we have witnessed in recent days.

Texas follows China and becomes Bitcoin mining center

Since China cracked down on the mining industry in 2021, Texas has quickly emerged as a new center for Bitcoin mining. Miners believe that their mining activities are beneficial to the Texas power grid because their flexible use of power can strengthen the stability of the grid. They can reduce power demand during peak periods and increase power supply during trough periods, playing a positive role in load balancing of the grid.

Texas’s cheap electricity, grid incentives, and unregulated energy market have attracted several companies, such as Marathon Digital, Riot Platforms, and Iris Energy, to add mining facilities in the state. According to a report by Foundry in September, U.S. Bitcoin miners using Texas mining pools accounted for 28.5% of the total computing power, a significant increase from 8.4% in 2021, ranking first among all states in the United States.

Bitcoin mining in Texas is also actively involved in power demand management. Riot Platforms, for example, received $31.7 million in power and demand response credits from ERCOT in August as an incentive to cut electricity usage by more than 95% during the summer heat. Iris Energy also received a $2.3 million energy credit that same month for voluntary reductions in electricity use.

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