2021 was a big year for bitcoin mining in America as new talent and equipment flooded the market, but some states are certainly more attractive destinations than others.
The latest data from the Global Energy Institute shows that the average price of electricity is lower in states including Texas and Washington, which certainly agrees with the fact that both are increasingly hot destinations for minting new digital currencies.
Large-scale miners compete in a low-margin sector, where their only variable cost is typically energy, so they are incentivized to migrate to the world's cheapest energy sources to invest in cryptocurrencies.
The price of energy in the United States varies
In California and Connecticut you will pay 18 to 19 cents per kilowatt hour, while in Texas, Wyoming, Washington and Kentucky you will pay less than half, according to the Global Energy Institute, which indicates an annual electricity price map of the country, using the year. latest comprehensive data available from the US Energy Information Administration.
The institute warns, however, that "while the available energy mix within a state will play an important role in state electricity prices, energy limiting policies in some states act to artificially raise prices, making the much higher electricity price for consumers and businesses ”.
Ultimately, what bitcoin miners care about most is finding cheap sources of electricity.
This is one of the reasons the United States proves particularly attractive to potential miners, as the country is home to some of the cheapest energy sources on the planet, many of which tend to be renewable.
Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings, expects most new miners moving to North America to be powered by renewable sources or gas offset by renewable energy credits.
Washington state is a mecca for hydroelectric mining, while Texas's share of renewable energy is growing over time, with 20% of its energy coming from wind as of 2019.
Electricity costs, however, are not everything. Friendly politicians and sufficient infrastructure are also key factors.
Take Texas
It has a deregulated electricity grid that allows customers to choose between energy suppliers, and most importantly, its political leaders are pro-crypto, dream conditions for a miner looking for a friendly welcome and low-cost energy sources.
The US also invested years in cryptomining infrastructure, long before it became popular.
When bitcoin crashed in late 2017 and the broader market entered a multi-year cryptocurrency winter, there wasn't much demand for big bitcoin farms. US mining operators saw their opening and jumped at the opportunity to hand out low-cost cash to build the mining ecosystem in the US.
According to Mike Colyer, CEO of digital currency firm Foundry, companies such as North American cryptomining operator Core Scientific continued to build hosting spaces throughout the period in order to have the ability to put in new equipment. Core, which operates in North Dakota, North Carolina, Georgia and Kentucky, is one of the largest blockchain infrastructure and hosting providers in North America.
