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FORT WORTH, TEXAS — The influx of crypto mining to rural Texas has engendered an outsized demand for energy, housing, and other essential services that the Lone Star state is struggling to deliver, according to Bloomberg News.

Large swathes of Texas that are opening up mining centers are devoid of infrastructure to sustain the new out-of-state workforce, who require essential services like hotel lodging, gas stations and restaurants.

When China banned crypto miners last year, Texas – with its cheap electricity, low taxes, and strong pro-crypto policies — became the main state that absorbed the new industry. However, it has struggled to deliver those services, and its power grid continues to be tested by surging demand during extreme weather events like cold snaps and heat waves.

Despite this predicament, Texas is the number one state in the U.S. for crypto mining, accounting for almost a quarter of the total mining activity in the country, according to mining firm Luxor Technologies.

In September 2021, a Virtual Currency Bill went into effect in Texas that legalizes crypto in the state. "Texas should lead on this like we did with a gold depository,” said Governor Greg Abbott at the time.

However, despite government support, the siting of crypto mines across rural Texas has presented its own challenges: “The housing situation out there is tricky," CEO Jamie McAvity of Cormint Data Systems, told Bloomberg

"You can bring all these jobs to rural Texas, but then you have to be able to lodge these people,” Collin McLelland, the CEO of Digital Wildcatters, told Bloomberg. “It’s all the same issues of where do people live and having to invest in infrastructure.”

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Part of the appeal of Texas is the abundance of electricity, but the reliability of the state's electric grid is also a major cause for concern.

This month, the state's grid operator, the Electric Reliability Council of Texas (ERCOT) said in a statement that Texas was under severe heat threat that might require a “larger than normal demand for power” — a move which is likely to impact crypto miners, many of whom have agreed to shut off mines during hours of peak demand. And there's even a financial incentive during peak hours: when they turn off the power, miners can sell the energy back to the state grid.

Others even believe the increased strain from crypto mining might compel the state to adopt more power generators. "Bitcoin mining is not going to solve all the grid's problems, but it is a part of the solution to be sure," Lee Bratcher, the president of Texas Blockchain Council, told CBS News.

However, although Texas lured in miners for its ability to provide cheap and abundant electricity quickly — as well as quickly connect mines to the power grid — there are also clear disincentives. 

"This will put a massive amount of stress on the Texas energy grid," William Magnuson,  an expert in cryptocurrency and the law at the Texas A&M Law School told CBS News. "We know the Texas energy grid has had its struggles in the last couple of years, so I do worry about the effects of imposing massive new energy use on a grid that we know is has been relatively unstable."

"How are they going to weigh the costs and benefits of adding this new mining companies to the grid? That is where the rubber meets the road," he added.

According to data from the Texas Blockchain Council, crypto mining is expected to explode in the Lone Star state over the next two years, quadrupling in number and making Texas the largest producer in the world of Bitcoin.

Not all groups paint such a rosy picture of Bitcoin's future in Texas, however. Producing just one Bitcoin in the state requires energy consumption equal to powering an average home in Texas for 62 days, CBS News reports.