Crypto miners are scouring the world to find the best locations to set up shop. However, finding the perfect location is quite a challenge, largely due to the vast number of requirements that are needed. Miners look for cold locations, as low temperatures help to reduce equipment cooling costs, land is generally cheaper, low electricity prices are common, and a crypto friendly jurisdiction is often in place.
Right off the bat, Iceland looks like the best place to mine cryptos, as it ticks all the boxes, and for that reason a whole host of top crypto mining firms operate in the country. However, America is about to put its name on the crypto mining map. The Permian Basin is back in action and looks like it holds the key to nearly free electricity.
Texas Loves Oil
In Texas, oil is more than something that comes out the ground and powers industries – it’s a way of life. The oil industry has created millions of jobs in the Lone Star State and made countless people rich beyond belief. However, during the period between 2015 and 2017, the oil price crashed to under $35 a barrel and this meant that the majority of oil wells in the state were temporarily capped. When the price of oil rose, the Texas Permian Basin came back to life and oil barons opened up their wells once again. Texas has one of the largest oil deposits it North America and this could be used to save the American crypto mining industry.
What does Oil Have to do with Crypto Mining?
When oil is extracted from the ground, it creates a byproduct – natural gas. Now, oil barons have two choices, either build infrastructure to capture and sell this gas – but due to a worldwide gas glut this isn’t very profitable – or burn it in a process called flaring. The vast majority opt to flare this gas and while it makes a pretty flame at the top of oil rigs, it’s not very eco-friendly.
Crypto mining firms could approach these oil companies and buy the natural gas directly from them, thereby securing an incredibly cheap energy source and helping to save the planet from the effects of flaring. While crypto mining farms would need to build a power plant to process the natural gas, burn it, and create electricity, we could begin to see power companies buying this gas and creating a low-cost power grid just for crypto miners.
Canadian Firms Already Doing This
Over in neighboring Canada they have a similar issue. There is an abundance of natural gas, but no infrastructure to take it to the coast to be exported. This has led to a number of companies extracting this gas and turning it into low-cost power which is then used to subsidize the crypto mining industry.
Hut 8 – the largest publicly traded crypto mining firm – has struck a deal with one such firm in Medicine Hat, Alberta to provide low-cost natural gas power at around three and four cents per kilowatt an hour. When you combine this low-cost power with some powerful Bitfury crypto mining equipment, Hut 8 has an average cost of $2,700 per Bitcoin – low enough to be highly profitable even in this bear market.
Isn’t the Heat an Issue in Texas?
In Texas, land is very cheap when compared with other parts of the world thanks to its sheer size and hot climate. While most people love the heat, crypto miners despise it, as it pushes up the cost of mining cryptocurrencies. However, TMGcore has come up with a novel solution to this problem. In order to take advantage of the ultra-low-cost power in Texas, TMGcore is submerging its ASIC mining rigs in 3M Novec – a state of the art cooling solution.
By submerging ASIC chips in this cooling fluid, it has managed to slash its power bills by 90%, something most other crypto mining firms could realistically implement. In addition to this, TMGcore captures the Novec when it has become vaporized, channels it into huge cooling towers to condense it, before pumping it back into the Novec baths – making the process relatively sustainable. Now TMGcore only has to run additional cooling equipment in the height of summer – roughly 3 weeks in July.
Hydroelectric Mining Getting Frustrating
Another boost for Texas is the fact that hydroelectric rich states like Washington and New York have pretty much maxed out their capacity. Local infrastructure can’t cope with the increasing demand for power, and until municipalities can upgrade the local infrastructure miners will have to look elsewhere. In Washington State, Franklin, Chelan, and Mason County have paused power applications for crypto miners as they simply cannot cope. This coupled with a price rise in the state has got crypto miners hunting for other locations in America.
America is trying its hardest to become a blockchain and crypto mining hub, and this new energy supply in Texas could be the key. If a couple of power firms start buying up this natural gas and selling it to crypto miners, we could quickly see Texas become the go-to crypto mining destination.