Texas Senator Says Bitcoin Mining Is Beneficial To Power Grid And The U.S. Economy
Bitcoin mining operations can improve the resiliency of Texas’s power grid as they can be shut off during emergencies to free-up the grid, said Ted Cruz.
“Texans love freedom, and so do digital asset bulls”
That is what U.S. Senator of Texas, Ted Cruz, had to say about the growing influence of Bitcoin in the economy of the Lone Star star.
Speaking in an interview with Forbes magazine, the Senator said that he was especially bullish on the apex cryptocurrency because it does not fall under the control of any single, central entity, thus offering users never-before-seen levels of financial freedom that is lacked by the existing fiat-based system.
Bitcoin’s Uncontrollable Nature A Threat To Authoritarian Governments
Cruz explained that the uncontrollable characteristic of Bitcoin is what triggered authoritarian governments like China to resist its growth and completely ban the digital asset in the country.
He pointed this aspect to be the key difference between Texas and the rest of the world as Texans love their freedom, a sentiment he believes resonates with cryptocurrency enthusiasts.
According to Cruz, Bitcoin is considered a more appealing option to store value because of the way it achieves uncontrollability. The blockchain that powers the cryptocurrency is secured through a geographically distributed network of computers that expend energy to solve a cryptographic puzzle.
This mechanism is called the proof-of-work (PoW) consensus, which serves as a foolproof method for issuing new Bitcoins. The one major advantage the decentralized blockchain has is that both its software and network are open-source, making it entirely possible for anyone with a computer to freely opt-in and contribute their computing power.
In return, the network contributor is rewarded with newly-issued Bitcoin for successfully solving the puzzle and adding a transaction to a block on the blockchain. The fee procured from confirming transactions across the chain is also shared with the contributors.
Bitcoin An “Emergency Reservoir Of Power”
While environmentalists criticize Bitcoin for the amount of electricity it consumes, claiming that the blockchain uses more power than some countries, Cruz believes that the network in reality adds more value to the energy sector.
While sharing his thoughts on X (formerly Twitter), the Senator said that Bitcoin mining operations can improve the resiliency of Texas’s power grid, as they can be shut off during severe weather conditions to free-up the power grid, allowing for effective distribution of electricity to homes for heating or cooling.
Cruz also declared Texas the “natural oasis” for Bitcoin mining as it is already jobs, innovation, and freedom hub. The Lone Star State is widely famous for its abundant and inexpensive electricity, which has led to notable increases in Bitcoin mining companies calling it home.
Speaking about the positive benefits of Bitcoin mining on Fox News Radio, he said that miners are able to monetize the excess energy that could go to waste by releasing it back to the grid whenever needed.
He called mining farms an “emergency reservoir of power”.
Texas Pays Bitcoin Miner Energy Credits For Resupplying Electricity To The Power Grid
The use case for the emergency reservoir came into full effect during last month’s heatwave when Riot Blockchain, one of the world’s largest Bitcoin mining companies with a total hashrate of 10.7 EH/s, turned down 95% of their power consumption in the state and released excess current back to the grid.
For its philanthropic efforts, the Electricity Reliability Council of Texas (ERCOT) - the state’s power grid operator, paid Riot $31.7 million in energy credits. According to a statement released by Riot Blockchain CEO Jason Les on Thursday, the value of the credits dwarfed the 333 BTC worth about $8.9 million the company had mined in August.
The latest energy credits consisted of $24.2 million received from energy sold back to ERCOT and $7.4 million in demand response credits. The Riot facility operating at Rockdale Mine, Texas, has been helping the state ease its burden on the power grid for years.
With Bitcoin miners on the block, their electricity consumption allows for an economically viable way to keep excess energy in the reserves that may be required occasionally throughout the year, especially during an emergency.
Bitcoin Mining Faces Historic Lows
The mining sector is going through bit of difficult period eversince Bitcoin and the cryptocurrency market started a price reversal after hitting all-time highs in September 2021.
According to an investor note from JP Morgan Chase analysts, the market cap of the 14 U.S.-listed Bitcoin miners fell 21% in August to $9.7 billion.
At the time of writing, Bitcoin (BTC) is trading at $25,801 - down 0.1% from the previous day’s price.