Bitcoin's network hashrate declined by approximately 25% over the past few days amid curtailment requests from the Texas grid regulator following a recent cold snap, with the U.S. state now established as a global hub for the industry.
Data from MiningPoolStats and Blockchain.com show global hashrate estimates fell from around 600 EH/s on Friday to 450 EH/s by Tuesday, coinciding with a weather warning for Jan. 14 to 17 issued by ERCOT due to extreme cold weather across the region. ERCOT, the Electric Reliability Council of Texas, operates as the grid regulator for most of the state.
ERCOT's warning was followed by official conservation appeals on Sunday, Monday and Tuesday. “Operating reserves are expected to be low tomorrow morning due to continued freezing temperatures, record-breaking demand and unseasonably low wind. We request Texas businesses and residents conserve electricity use, if safe to do so,” ERCOT said. Yesterday's most recent curtailment request ended at 9 a.m. CT.
The hashrate reduction implies more than four gigawatts of power capacity was curtailed during the period, TheMinerMag previously reported.
Miners pointing toward Foundry USA Pool — one of the largest mining pool operators by hashrate — appeared to be responsible for around half of the decline, dropping from an estimated 155 EH/s on Friday to 77 EH/s yesterday, before recovering, according to MiningPoolStats.
Luxor Mining Pool's users were also impacted by the cold snap. “Luxor mining partners have significantly curtailed their operations, shutting down machines to give back power allocation to the grid over the last few days,” Luxor Technology Chief Operating Officer Ethan Vera told The Block.
Hashrate history. Image: MiningPoolStats.
Texas emerges as Bitcoin mining hub following China's crackdown
China-based Bitcoin miners previously led the world in terms of total hashrate. That dominance plummeted in 2021 following shutdown orders from regulators as the country launched a crackdown against the industry.
Texas emerged as an alternative hub, with miners arguing at the time that mining is just as good for Texas as Texas is for miners since the flexibility of the industry's electricity use can strengthen the state's power grid, curtailing demand during peaks and injecting it during troughs.
Firms including Marathon Digital, Riot Platforms and Iris Energy are among those who have added to the concentration of Bitcoin mining facilities in Texas over recent years, attracted by cheap electricity, grid incentives and the state's deregulated energy market. A report by Foundry in September said U.S.-based Bitcoin miners using its pool in Texas accounted for 28.5% of its hashrate in the country, the largest share among states by some margin and up more than two times from 8.4% in 2021.
Texas Bitcoin miners are no strangers to curtailment requests in the state either. In August, Riot Platforms received a new monthly record $31.7 million worth of power and demand response credits, administered by ERCOT, after cutting its power usage by over 95% during the summer heatwave. Iris Energy also received $2.3 million in energy credits in the same month, primarily driven by voluntary curtailment at its Childress site in Texas.