Recently, news broke that Cancun-loving Republican Senator Ted Cruz had gotten into crypto. But unlike other Bitcoin groupies who just want to rave about the limitless possibility of digital currency to uninterested strangers at the bar or on Twitter, Cruz suggested the new frontier of financial tech might be the thing that could save Texas. Or at least, its failing power grid.
According to Cruz and other proponents, making Bitcoin miners stakeholders in the state’s current power play may actually help with overload problems — which is what led to the ERCOT grid shutting down during a terrible blizzard that left hundreds dead and millions without power. Cruz seems to think that simply incentivizing Bitcoin mining companies — all of whom use a ridiculous amount of energy to power their warehouses full of supercomputers — to shut down their tech when demand is high will fix the state’s energy problems. The trouble with that theory? It seems to be BS.
Dozens of Bitcoin mining and blockchain companies are flocking to Texas because of the state’s loose energy laws. They claim they’re lowering energy costs for residents by harnessing unused power. They also say they have the ability to power down immediately when the energy demand is high, helping to stabilize the grid. Of course, the problem with that theory is the Bitcoin industry isn’t regulated, so companies operating in Texas aren’t required to stop using hundreds of megawatts-worth of energy — in some cases, enough to power an entire city — just because the Texas legislature asks them nicely.
In an interview with KVUE, cryptocurrency expert and Texas A&M Professor William Magnuson said that Cruz’s plan to rely on Bitcoin miners to save Texas won’t work.
“We know that the Texas grid is unstable,” he said. “How do we know that cryptocurrency miners are acting responsibly? How do we know if cryptocurrency miners will power down their facility when the electricity grid is struggling? There is no central database that keeps track of where all the Bitcoin mines are located. We don’t know where many of them are except [through] press releases. We need our government regulators to step in and clarify the rules that apply to cryptocurrency.”
If Texas doesn’t even know how many Bitcoin mining companies are in the state, it’s doubtful they could even enforce an energy cap in the first place. All that to say, we hope Cruz has booked his flights to Mexico this winter because it sounds like Bitcoin is about to earn him even more bad press.
(Via KVUE)