Within the past few months, one company opened a bitcoin mining facility in Texas and another announced they were building one. People are confused because one of the biggest cost factors in mining is heat, which Texas has an excess of. Leo Zhang, Research Lead at Iterative Capital, an investment managing and cryptocurrency mining company shared some insight as to why mining is coming to Texas.
“There’s alot of cheap elecricty, the United States has alot of power,” Zhang told Frank Chaparro in The Scoop’s interview. “People are beginning to realize that we can use this otherwise wasted electricity for bitcoin mining.”
Zhang went on to say that finding dirt cheap electricity is becoming more important in the process of mining, especially in China. Texas is deep into the business of producing electricity and some companies likely have an abundance because of the competition which results in lower electric prices for mining facilities.
“Mining for North America is still relatively new, especially mining at scale. Most people who are building these facilities are not miners themselves as opposed to people in China, they were miners first and then realized to fully capture this economy, I have to own my facility as well,” Zhang clarified.
While there isn’t a great reason to doubt the insight of someone who has been a profitable large scale miner for some time, Zhang only briefly touched on why he has negative opinions about the Texan miners in question. He said that he had phone calls with people who own remote locations in Texas and while they were confident about the power capabilities, they had yet to factor in other important costs. Zhang feels like facility owners in the US see miners as “suckers” who they can pawn off their excess electricity to.