A secret meeting took place in August in Texas to discuss the possibilities of mining synergies
The Chinese authorities’ clampdown on cryptocurrency mining in China, which has long been regarded as the world’s hub for cryptocurrency mining (around 75 % of all mining activity is said to be located there), seems to have reached a new stage. For Chinese miners, the hunt for new frontiers where they can continue their lucrative business has begun.
Texas offers hospitality to miners
One of the states that immediately showed itself to be the most open and ready to offer hospitality to cryptocurrency miners was the state of Texas, which boasts very favourable energy conditions for an activity that we know requires a huge expenditure of electricity.
At the end of August, in a residential street in Houston, a meeting was held between some important local oil companies and some cryptocurrency miners, to talk about the possible synergies to be created in order to extract cryptocurrencies locally.
According to sources present at the meeting, they discussed the possibility of exploiting the country’s vast natural gas reserves to power the power generators needed for mining.
It’s a great opportunity for Texas
One of the oil workers present at the meeting, who decided to convert his business to cryptocurrency mining, said “When I heard that it was possible to make so much money per MCF (a metric used to measure natural gas), instead of burning it into the atmosphere, through bitcoin mining, I thought this would be a great opportunity for Texas as a whole.”
After China took a stand this spring, dozens of mining companies came to Texas because of the favourable energy conditions the country could offer.
“This is Texas, guys. We’ve got what it takes. We’re sitting on the energy capital of the world,” said another of the meeting’s participants.
Many Chinese miners moved to neighbouring countries such as Kazakhstan, Uzbekistan and Ukraine after the authorities banned them, but are now looking more interested in moving to countries where they can have stable and better conditions for their business, such as Texas and Canada.
Mining Bitcoin the green way
In addition to the opportunity to talk about contingencies and logistics in the mining business, the meeting in Houston probably also served to illustrate new ways of mining cryptocurrencies in a sustainable way, an issue that has long been a concern of the crypto world.
Many still remember Elon Musk’s tweet on 12 May about the excessive energy consumption of mining, which caused Bitcoin’s price to plummet.
In May, Musk himself had participated in the Bitcoin Mining Council, a way “to promote transparency in energy use and accelerate sustainability initiatives worldwide”.
This meeting was followed by a tweet from Musk himself in which he explained that he had spoken to Bitcoin miners in North America:
“They have committed to publishing current and planned renewable energy use and asking miners to do the same.”
The sustainable proof-of-stake system
This is also the reason why many cryptocurrencies are increasingly adopting the so-called proof-of-stake system: instead of rewarding who wins the computational race, (as in Bitcoin’s proof-of-work) nodes are randomly selected to participate in the blockchain.
This system would require about 1% of the energy required by the system used in Bitcoin mining.
One of the largest mining farms, completely generated by clean energy sources, is said to exist in Texas. According to research by the University of Cambridge, the share of renewable energy used for cryptocurrency mining is around 78%.
And according to many, this could be the new business of the future – sustainably produced Bitcoin.
Mining, a great business opportunity for energy-rich countries
All energy-rich countries are starting to see mining as a serious business opportunity.
Venezuela and Iran have officially declared their intentions to mine cryptocurrencies and Middle Eastern heavy energy producing nations are planning to launch their own CBDCs.
Many northern European renewable energy nations are also seriously considering using some of their clean energy to offer to cryptocurrency miners.
The Norwegian oil giant Aker ASA has very quickly become a large holder of bitcoin and a direct investor in various operations, including mining.
All these moves show that energy producing regions have no choice but to participate in the mining of digital currencies. It is very likely, therefore, that what happened in Texas may very soon be repeated in other countries. Because what seems inevitable now is an ever closer synergy between energy companies and large cryptocurrency mining farms.