Shutdown mining farms: why the heat wave will become a real problem

Crypto winter on one side, extreme heat on the other. And between the two, it’s the mining activity that wins. As Texas currently faces temperatures that easily exceed 35 degreesthe operators of the state electricity networks have asked the companies that manage the mining activities to stop their activities.

The explanation is already widely known, the mining that responds to the principle of PoW (Proof of Work) or proof of work, is known to be very energy-intensiveso much so that it would consume nearly 0.5% of all the world’s electricity.

An activity that also generates a lot of heat and which prompted the Texan authorities to request this stop in order to limit the “heat dome” which is currently falling on this American state, on the front line of Bitcoin mining.

A stationary activity… but not for free!

The Texas Blockchain Council, an industry association that represents more than 40 crypto companies, has thus agreed to suspend its activities until the temperatures drop a few degrees. Ditto for the Riot Blockchain, one of the largest mining operations in Texas, who proudly announced on Twitter that they had paused mining. These joint efforts have made it possible to reduce the State’s electricity consumption by 1%.

A single #bitcoin company is helping provide enough energy to power 13,000 households! 🏠⚡️ When the heat wave ends, @RiotBlockchain will flip the switch and turn their machines back on and continue making a profit until the next time the energy grid needs to be stabilized.

What these companies are careful not to say, however, is that financial compensation is planned and that their participation is not entirely innocent. You should know that the mining becomes proportionally less interesting when the price of the cryptocurrency is under pressurewhich is currently the case with Bitcoin (BTC), which is struggling around $20,000, or even below.

Read also Cryptocurrency: With recent price drops, what to expect this week?

For mining farms, compensation (the figures of which often remain secret) make it possible to compensate for the drop in income generated by mining in times of high volatility.

Is mining in danger?

However, this does not change the reality of today: cryptocurrency mining risks becoming a collateral victim of global warming. Does this mean that it will be up to the authorities to pay the bill if this activity is damaged due to successive heat waves?

This question is already asked in the United States, where mining activity has grown exponentially (35.4% of global activity at the end of 2021) since China declared it non grata on its territory. Texas is, moreover, an ideal host country for minors, the the cost of electricity is among the cheapest in the world.

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