U.S. Senator Ted Cruz (R-TX) addresses a news conference on Capitol Hill in Washington, October 6, 2021.
Evelyn Hockstein | Reuters
AUSTIN, TEXAS – The Texas power grid is struggling with fluctuating energy prices and sporadic service, but the state’s growing bitcoin mining community believes it can help fix it.
Republican Sen. Ted Cruz agrees. “A lot of the discussion around bitcoin views bitcoin as a consumer of energy,” said Cruz at an event in October. “The perspective I’m suggesting is very much the reverse, which is as a way to strengthen our energy infrastructure.”
The grid is called ERCOT — short for the Electric Reliability Council of Texas, which is the organization tasked with operating it — and it’s fussy and temperamental.
ERCOT powers about 90% of the state, but to run smoothly, it requires a perfect balance between supply and demand. Having too much power and not enough buyers is just as bad as everyone wanting to fire up their AC units on the same day in July.
Maintaining that balance has proven to be a real challenge this year, and Texans are feeling it.
The price of power per hour is all over the place, routinely going negative. Rolling blackouts at moments of peak power consumption no longer come as a surprise. A lot of people lost faith in the grid altogether after a winter storm earlier this year resulted in a multi-system meltdown that “was within minutes of a much more serious and potentially complete blackout.”
Crypto enthusiasts believe the fix to this problem is actually to add another electricity consumer into the mix — a buyer who will take as much power as they’re given, whatever the time of day, and are just as willing to power down with a few seconds’ notice. These flexible buyers are bitcoin miners.
Mining for cryptocurrencies is the computationally intensive process by which new tokens are created and transactions of existing digital coins are verified.
At the Texas Blockchain Summit in October, Cruz pointed to the ability of bitcoin miners to turn their rigs on or off within seconds — a feature that is hugely beneficial during times when energy needs to be shifted back to the grid to meet demand.
“If you have a moment where you have a power shortage or a power crisis, whether it’s a freeze or some other natural disaster where power generation capacity goes down, that creates the capacity to instantaneously shift that energy to put it back on the grid,” Cruz said of the ability of bitcoin miners to shut down their operations within seconds.
But not all are convinced that bitcoin miners are the solution.