This map shows the best U.S. states to mine for bitcoin
2021 has been a great year for bitcoin mining in America as new talent — and equipment — flood the market, but some states are definitely more appealing destinations than others.
According to the Global Energy Institute, the average electricity price in the United States is lower than those of Washington and Texas. This is a good sign given that these states have become increasingly popular for the production of digital currency.
Although the price of electricity is not everything that matters when setting up shop in a new location, it does make a difference.
Scale miners are competing in a low margin industry where the only variable cost is usually energy. This incentivizes them to seek out power from less expensive sources.
There are many variations in the price of electricity across the United States.
In California and Connecticut you will pay anywhere from 18 to 19 cents per kilowatt hour, whereas in Texas, Wyoming, Washington, and Kentucky, you will pay less than half that, according to the Global Energy Institute, which puts out an annual electricity price map of the country, using the most recent full year of data available from the U.S. Energy Information Administration.
The institute does warnThe Global Energy Institute explains that while the state’s energy mix will be a major factor in electricity price, some state energy-limiting policies can increase electricity prices for businesses and consumers.
Finding cheap electricity is what most bitcoin miners are concerned about.
Because the United States is home to many of the lowest-cost energy resources on Earth, and most of them are renewable, this is why it is attractive to potential miners.
Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings, expects most new miners relocating to North America to be powered by renewables, or gas that is offset by renewable energy credits.
Blockstream CEO Adam Back explained that miners are price sensitive so they seek out power at the lowest cost.
Washington state is a mecca for hydropowered mining farms, while Texas’ share of renewables is growing over time, with 20% of its power coming from wind as of 2019.
However, electricity prices are not everything. Key factors are friendly policymakers, sufficient infrastructure and adequate funding.
Let’s take Texas as an example.
It has a deregulated power grid that lets customers choose between power providers, and crucially, its political leaders are pro-crypto — dream conditions for a miner looking for a kind welcome and cheap energy sources.
Brandon Arvanaghi, a bitcoin mining engineer said that there will be a significant shift in the coming months. We have Texas governors such as Greg Abbott who support mining. This is going be a huge industry in America.
It is also worth noting that the U.S. spent many years in cryptocurrency mining infrastructure long before this was popular.
The demand for large scale bitcoin farms was low after the crash of bitcoin in 2017 when it became increasingly difficult to find bitcoin. The U.S. saw the opportunity and took advantage of it to raise cheap capital to expand the US mining industry.
Mike Colyer, the CEO of Foundry, a digital currency firm, said, “The big, publicly traded miners were in a position to raise capital for large purchases.” Foundry has helped import over $300 million worth mining equipment into North America.
Colyer said that Core Scientific, a North American cryptomining company, kept creating hosting space throughout the duration of the period to allow them to add new equipment. Core, which has operations in North Dakota, North Carolina, Georgia, and Kentucky, is one of the largest providers of blockchain infrastructure and hosting in North America.