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Targeting high water use, energy waste, and round-the-clock noise, skeptics are challenging Bitcoin efforts in Navarro County and the state of Texas, the author of ‘Let Them Eat Crypto’ writes.
Peter Howson
Texas loves crypto. At least, that’s what you’d think listening to the deafening drone of the world’s largest Bitcoin mining hubs springing up across the state. They run at around 85 decibels. The noise is equivalent to having a hair dryer blowing full power next to your face 24/7.
Crypto mining globally is responsible for using a big, developed country’s worth of electricity every year. The industry spits out thousands of tons of burned-out e-waste and toxic “forever chemicals.” These are the cancer-causing fluids that never break down, but are used and dumped without remorse to cool noisy Bitcoin machines.
Over the last two years Texas has overtaken China as the global Bitcoin superpower. Using mainly gas and coal, no other jurisdiction on Earth creates more crypto than the Lone Star state.
Texas has always had a haphazard approach to keeping the lights (and Bitcoin machines) on. Unlike most other US states—which benefit from integration with the Eastern or Western Interconnections power grids—Texas operates its own grid and is uniquely vulnerable to poor energy planning. When the lights go out here, people die. After hundreds died from hypothermia during a winter storm in 2021, US regulators recommended urgent upgrades to ensure the Texas network’s reliability in extreme weather conditions. The recommendations were ignored.
With an increasing body count, in 2022 the state grid operator, the Electric Reliability Council of Texas (ERCOT), devised a new energy management strategy. To prepare for more frequent and severe weather events caused by climate change, Texas would turn to Bitcoin.
The reason given for the seemingly bizarre energy policy was “load balancing.” Bitcoin miners escaping from corrupt regimes overseas (otherwise known as countries with environmental laws) promised to “stabilize” the Texas grid. These incoming Bitcoiners negotiated 10-year fixed-supply agreements, paying around 2.5 cents per kilowatt hour for electricity pulled from the grid. The going residential rate is 18.5 cents.
A “demand–response program” would enable power suppliers to ask Bitcoiners to shut down their operations when demand across the grid was high. If they did so voluntarily, ERCOT would pay the company credits towards future power. Miners from all over the world flocked to Texas enticed by the low energy prices and lax environmental regulation. As of mid-2023, the state was home to around 10 percent of all the world’s Bitcoin miners, who together were adding 20,000 megawatts of demand to the Texas grid. That’s roughly equal to the amount of electricity used by the whole of Houston.
Heatwaves have brought ”exceptional drought” conditions to much of Texas—the highest categorization of dryness—denoting “widespread crop loss, dead rangeland, producers not planting fields, forestry, tourism, and agriculture sectors reporting significant financial loss, and extreme sensitivity to fire danger.” Last year, hundreds of Texans suffered heat-related deaths. Many endured rolling blackouts.
Meanwhile in Rockdale, Texas, Riot Platforms—owners of the world’s biggest Bitcoin-mining center—were sucking up millions of gallons of cool fresh water.
The huge amount of electricity Riot needs is enough to power every home in the county ten times over. One Texas-based activist, Jackie Sawicky, told me that the additional water demand would be enough to fill two Olympic-sized swimming pools every day. “These people are parasites,” Sawicky said.
“Riot spoke to us at a town hall meeting. They were honest. They said, ‘You people have two very important things for Riot: water and the Navarro County electrical switching station.’”
According to Texas Senator Ted Cruz, Bitcoiners were there to fix the grid without the need for government interference. “A lot of people view Bitcoin as a consumer of energy,” said Cruz at an event in October 2021. “The perspective I’m suggesting is very much the reverse, which is [using Bitcoin] as a way to strengthen our energy infrastructure.”
For Sawicky, the Bitcoiners’ intentions were clear: “They’re coming here to exploit the shit out of us,” she said.
According to energy management services firm Voltus, miners relocating to Texas could
Read More: Texas Anti-Crypto ‘Week of Action’ to Challenge Bitcoin’s Hidden Costs