Texas paid bitcoin miner Riot $31.7 million to shut down during heat wave in August

Summary

Texas-based bitcoin miner Riot Platforms earned $31.7 million in energy credits from the Texas power grid operator ERCOT in August. The credits were earned by voluntarily cutting back on energy consumption during a record-breaking heatwave. The credits make up for Riot's losses, which have been mounting due to the crypto market downturn. The company is benefitting from alternative sources of income, such as credits from selling power back to the Texas grid, to keep its costs down. The Electric Reliability Council of Texas has a mutually beneficial relationship with bitcoin miners, paying them to reduce their power when air conditioners need to run at full blast. Texas has made itself an ally to the bitcoin mining industry through credits, but the incentives hit a snag in early 2023 when a bill to cut off the industry from those credits passed the Texas State Senate.

Q&As

AI Comments

👍 Riot Platforms found an innovative and mutually beneficial way to reduce their cost of mining Bitcoin by taking advantage of energy credits available in the Texas power grid.

👎 The Electric Reliability Council of Texas has historically struggled with fluctuating energy prices and sporadic service, so the agreement with the bitcoin miners is a risky one.

AI Discussion

Me: It's about a bitcoin miner Riot Platforms that earned $31.7 million in energy credits from the Texas power grid operator ERCOT in August. Riot took advantage of credits available by limiting its energy consumption during a record-breaking heatwave.

Friend: Wow, that's a lot of money. What are the implications of this article?

Me: Well, it shows the potential for alternative sources of income for bitcoin miners. Riot is losing money from their mining operations, so the energy credits they earned from ERCOT are a way for them to make up for those losses. It also highlights the relationship between ERCOT and bitcoin miners, as ERCOT pays miners to reduce their power to relieve stress on the grid. Finally, it shows how Texas has become an ally to the bitcoin mining industry by providing financial incentives, and how that relationship has benefited both sides.

Action items

• Research the demand response programs offered by ERCOT and other power grid operators to determine if they are a viable source of income for bitcoin miners.
• Explore the potential of using bitcoin miners to provide a hedge against disaster for power grids.
• Investigate the impact of the two mining-friendly bills passed in Texas and how they could affect the bitcoin mining industry.

Technical terms

Riot Platforms

A bitcoin mining company based in Texas.

ERCOT

The Electric Reliability Council of Texas, the power grid operator in Texas.

Bitcoin

A digital currency created in 2009 that uses cryptography to secure transactions.

Demand Response

A program in which ERCOT pays miners to reduce their power consumption to avoid overstressing the grid.

Rockdale Mine

A bitcoin mining facility owned by Riot Platforms located in Rockdale, Texas.

SB 1751

A bill proposed in Texas in 2021 that would have cut off the mining industry from energy credits.

Meow

A company that enables corporate treasury participation in crypto markets.

Controllable Load Resource

A resource that can be used to provide a safety net for the grid in times of disaster.

Similar articles

0.84882104 Nearly 1.1 GW of new capacity starts up in Texas power market in March: report

0.84428126 Elon Musk says Twitter cash flow is negative due to ad revenue declines, 'heavy debt'

0.84304786 Bitcoin Approaches $30K, Reaching Highest Price Since June

0.8408046 First Mover Asia: Bitcoin Market Cap Is Surging, but a Retreat From $30K Continues

0.8406023 Bitcoin Holds Steady Above $28K, Ether Rises in Post-Rate Hike Rally