Unless you’ve been living on a remote island without TV or internet, you’ve heard about Bitcoin. The world’s first and largest decentralized cryptocurrency has gone from being worth less than a penny in 2010 to several thousand dollars today. The cryptocurrency has faced sharp criticism, but that hasn’t slowed its ascent. With so much money to be made from this digital money, it’s no surprise that it’s one of the world’s most popular assets. Mining bitcoin has become a profitable endeavor. However, mining the most sought-after cryptocurrency isn’t easy. So, entrepreneurs across the globe have sought out the best locations for mining the coin, with many setting their sights on Texas.
An Unexpected Bitcoin Capital
When you think of Texas, cryptocurrencies and Bitcoin probably aren’t the first things that come to mind. When it comes to entrepreneurship, Texas is most commonly associated with the oil industry. However, times have changed, and Texas is quickly becoming a top destination for entrepreneurs looking to strike it rich with bitcoin. Comparisons between bitcoin mining and popular games many of us know and love are becoming increasingly common. In fact, some well-known companies, including Starbucks, the online marketplace Etsy, and even the largest online casino company PokerStars Casino, accept Bitcoin. What’s undeniable is that bitcoin entrepreneurs are changing the face of the lone star state.
Cheap Energy Prices
Texas has a long history as a boom state, with oil motivating many to move to the state in the late 1800s. Today’s boom is bitcoin. Energy is cheap in Texas, making it an attractive location for bitcoin miners. Mining bitcoin is an energy-intensive activity. Unlike mining minerals and metals from the earth, Bitcoin mining consists of programing computers to execute complex calculations that add value to the blockchain.
It’s a painstaking process that’s repeated 24/7 and uses a significant amount of energy. Given the amount of energy bitcoin mining users, the only way for miners to profit is to find cheap energy sources. Texas’ affordable energy prices and its stable regulatory environment have resulted in a bitcoin movement.
Entrepreneurs from around the world are moving to the state to take advantage of the favorable environment. The energy market is cheap in Texas because there are more electricity providers than in other parts of the country, leading to competition between energy companies.
Consumers can change companies if they find the prices too high, giving them more choice. Bitcoin farms can enter into long-term contracts with power companies to purchase energy at fixed prices over several years. Larger bitcoin farms end up acting as virtual power plants.
When energy demand is at its peak, bitcoin farm can sell their unused power back to the grid. During the state’s energy crisis in February, bitcoin farms were paid to stay offline. Texas power companies also pay the farms to decrease their usage during the summer when energy usage increases in the state.
China Turned On Bitcoin
Before China banned cryptocurrencies in May of 2021, the country was a bitcoin farming hub, accounting for 70% of global bitcoin mining power. The ban has sent the China-based bitcoin farmers, known as bitcoin refugees, rushing to find a new home. They couldn’t waste time because every minute a bitcoin computer isn’t running complex algorithms is money lost. During the rush, many of these refugees discovered Texas and settled in the state. An unprecedented move that has been coined, “the great bitcoin migration.”
The bitcoin refugees are confident what happened to them in China won’t happen in the US. They’ve quickly settled into Texan life, with the state’s governor recently tweeting that Texas will be the crypto leader. With so much support, the new Texans have been able to focus on the business of mining bitcoin. Bitcoin supporters see the migration of bitcoin entrepreneurs to the state as a win for the United States that has attracted talent and will foster innovation. As it looks, Texas is the ideal place to be a bitcoin entrepreneur.