According to CoinShares, the CoinShares research team recently conducted a due diligence investigation in Texas to evaluate several Bitcoin (BTC) mining facilities. The evaluation included companies that CoinShares has previously invested in or that are included in the BLOCK Index and WGMI, including Core Scientific, IREN, Riot Platforms, and Galaxy Digital.
Texas: A Growing Hub for Bitcoin Mining
Traditionally known for its agriculture and oil sectors, Texas is quickly becoming a key player in the data center industry. The state’s cheap land, cheap power, and favorable political climate make it an attractive location for Bitcoin mining operations. Each company CoinShares visited showcased unique cooling solutions essential for efficient mining in Texas’ hot climate. Some cooling methods proved to be prohibitively expensive, while others proved more economical.
Innovative Cooling Solutions
IREN stands out for its large-scale, low-cost air-cooling solutions, highlighting advanced filtration and ventilation systems. The CoinShares team observed the rapid adjustment capabilities of IREN’s machines at the Childress site to match grid requirements and power prices.
Galaxy Digital, which acquired the Helios site from Argo Blockchain for $65 million, is switching from expensive immersion cooling to evaporative air cooling. The site currently has the potential to grow from 200MW to over 800MW. Galaxy also helps to balance grid load by reducing mining during high power prices and selling unused power back to the grid.
Challenge and Expansion
Despite financial difficulties, Core Scientific is operating large-scale sites using proven air-cooling technology, signing a sizable hosting deal with Coreweave and expanding into AI.
Riot Platforms has been notable for its technological advancements and capital-intensive operations, particularly at its Corsicana site, which aims to expand to 1GW. Riot’s Rockdale site features mining hardware cooled in a bath of genetic fluid, a cutting-edge approach that allows for overclocking to increase revenue when prices rise.
Future outlook
After the halving, the hashrate dropped by about 14%, pushing out inefficient miners. However, CoinShares expects this drop to be temporary. The miners on the list have significant expansion plans, which will likely push the total network hashrate above 700 exahash by the end of the year. All listed miners are aiming to increase their hashrate from 118 exahash by the end of 2023 to 234 exahash by the end of 2024, representing a 98% increase.
The Bitcoin mining industry is maturing rapidly and becoming more environmentally conscious. Miners are reducing their power usage during peak demand periods, improving grid efficiency, and investing in renewable energy and grid infrastructure. This growing environmental awareness is leading to increased political support for the industry in Texas.
Image source: Shutterstock