A new bill is making its way to the Texas House of Representatives that might make it hard for crypto mining companies within the state to gain access to the funds and resources they need to stay afloat and function properly.
Texas Crypto Bill Is the Wrong Move
The bill, for one thing, would ensure that power costs for the largest crypto miner in the state will increase by as much as $30 million each year. Also, miners would only be able to provide a limited amount of power to the Electricity Reliability Council of Texas (ERCOT), and bitcoin miners would also not be allowed to access the same property tax breaks currently available to standard industrial power consumers.
The situation is an odd one in that bitcoin mining profits have already shrunk by as much as 60 percent over the last year, largely due to the ongoing crypto winter and the dips many digital asset prices have incurred. Companies like Riot Blockchain – one of the most prominent crypto mining firms in the country – say the power credits that they’re currently privy to make a huge difference in how much they pay and how much they make each year. Representatives for the firm put out the following statement:
These credits are recognized in power curtailment credits in the statements of operations, outside of cost of revenues, but significantly reduce the company’s overall cost to mine bitcoin. When netting the power curtailment credits with the costs of revenues, the net costs as a percentage of mining revenue were 39.7 percent and 24.7 percent for the years ended December 31, 2022, and 2021, respectively.
The bill has already passed the Senate, though it would need to be signed into law by Texas Governor Greg Abbott, who has shown himself to be a bitcoin and crypto fan in the past. Thus, it’s unlikely, analysts say, that he will react favorably to the bill, though it’s impossible to assume this couldn’t happen for some reason.
Helping Miners Relocate
Texas has long been a major bitcoin and crypto mining hub, so it’s odd that such a bill would ever make its way through the state’s political spectrum. The state has highly devoted to mining for about two years now, largely because so many miners have been forced to leave their native China. That country declared crypto mining illegal in 2021, and several made their way to Texas due to the state’s large, vast, and open landscapes and its cheap electricity prices.
While the situation hasn’t been perfect, the sudden influx of miners has given Texas’ economy a major boost. It has also created jobs and opened opportunity windows on all sides of the state, so it seems very strange that such an anti-crypto bill would garner support.
