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Whenever Bitcoin miners flock to a new location, the local electricity prices soar. In Texas, one of the most popular states for Bitcoin mining, Bloomberg reports that upgrades to the local electricity grid may soon involve an increase in electricity fees for consumers across the Lone Star state.

Bitcoin mining adds extra stress to a strained electric grid and sometimes requires costly upgrades to the system. In recent months, Texas’ lack of regulation and low-cost electricity has spurred an exodus of Bitcoin miners from China and Kazakhstan to enter the state, buoyed partly by Governor Greg Abott’s plan to make Texas the headquarters for crypto mining nationwide.

Later this month, the Texas grid operator — the Electric Reliability Council of Texas, or ERCOT — plans to hold a vote on whether to create a taskforce to assess the number of Bitcoin mines hooked up to Texas’ electric grid and the speed in which they’re operating.

Regardless of what the number of mines may be, the burden of upgrading a shaky grid largely falls on Texas utilities, who must evaluate the option of directing funds toward protecting against power outages or long-term upgrades to the system in order to continue attracting crypto miners from across the world.

The other question is how much local electricity prices will increase as a result of the Bitcoin mining boom.

Texas is not the first state where the tension is playing out. According to a 2021 study from the University of California, Berkeley, after Bitcoin mining operations were established in upstate New York, local residents were forced to pay $250 million a year more in annual electricity bills, with private citizens facing around $8 more in additional electric bills and small businesses forced to pay $12 more in electricity costs.

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“Small businesses operate on very thin margins, so I don’t think they’d be happy paying for the energy that crypto miners are using,” said Berkeley professor Matteo Benetton, one of the authors of the study.

The economic dividends promised by Bitcoin mining — usually pledging greater employment and tax revenue — sometimes never materialize. Worse, the mining operations can sometimes migrate out-of-state or overseas, if companies shut down their operations or stricter regulation forces them out prematurely. “The profits do not stay local: Bitcoin mining profits can be moved from upstate New York to Italy or Colombia or China in a second,” Benetton said.

While some local governments offer discounted electricity to lure in miners, Berkeley’s study illustrated that Bitcoin mining only provides $40 million a year in increased tax revenue from options like real estate taxes. That additional revenue, however, still does not offset the rise in electricity costs for local residents.

In states like Texas, crypto mining companies conserve power during peak periods or during moments of particular stress. But beyond the increased electricity cost for residents, there is the steep environmental price from mining. 

In 2017, Bitcoin mining guzzled up only 0.5% of global electricity. Today that number has skyrocketed. According to the University of Cambridge’s Bitcoin Electricity Consumption Index, global crypto mining guzzles up energy equivalent to powering every light in America — twice.

Some estimates calculate that crypto mining emits almost 80 million tons of CO2 into the atmosphere, roughly equivalent to the emissions of over 15 million cars. 

“The energy required to validate just one Ethereum transaction could power a U.S. home for more than a week. The energy required for a Bitcoin transaction could power a home for more than 70 days,” said Frank Pallone, the Chairman of the House Energy and Commerce Committee earlier this year.