Crypto Data Centers are Booming in the US
As more overseas markets move to ban cryptocurrency mining, the US expands its lead as the top global Bitcoin miner with a wave of new low-cost data centers.
The growing ban on Bitcoin mining in several countries, including Russia and China, is fueling the growth of specialized data-crunching facilities for cryptocurrency mining in the already red-hot US data center sector.
The United States is getting the lion’s share of mining for Bitcoin and other cryptocurrencies that require a huge amount of blockchain data-crunching. Bitcoin mining is thriving in Texas, and strong sectors have developed in Wyoming and Georgia.
According to the Financial Times, the push to ban cryptocurrency mining overseas—including an effort led by Sweden for a European Union-wide ban—has boosted a wave of Bitcoin mining data center projects in the US.
Ironically, while the strain on electrical grids from Bitcoin mining has strengthened the opposition to it overseas, the specialized data centers in the US that crunch cryptocurrency puzzles are much less costly to build than the hyperscale data centers used by Meta, Amazon and Google, in part because they don’t need robust backup power systems.
Downtime that is mission critical to the internet giants is not a concern for Bitcoin mining operations, which do not have to run 24/7. CBRE estimates that a hyperscale data center costs between $7 million to $10 million per megawatt to build out; crypto data centers can be built for between $250,000 and $500,000 per megawatt.
According to the Texas Blockchain Council, 5,000 megawatts of cryptocurrency mining data center capacity will come online in Texas by 2023. The Cambridge Bitcoin Electricity Consumption Index ranks the United States the global leader in cryptocurrency mining, with the US consuming nearly 35 percent of the electricity used globally to mine crypto (also known as the global “hash rate”).
The low cost of power is driving crypto-mining data centers to Texas. In addition to its status as an oil and gas superpower, Texas built a $7-billion smart grid for Wind Power in West Texas, the largest wind-energy grid in the US.
Abilene, TX and Taylor County recently announced a partnership with Houston-based infrastructure company Lancium to build a $2.4-billion Bitcoin data center farm. In Atlanta, Bitcoin mining startup CleanSpark runs 48 mobile data centers, each with 166 Bitcoin mining computers inside.
With abundant energy resources and a strong fiber-optic network, Wyoming has set a goal of becoming home to five percent of the US Bitcoin hash rate by May 2024 (which is the next time the Bitcoin block subsidy gets cut in half, known as the halvening). US Sen. Cynthia Lummis (R-WY), who has become known as “The Bitcoin Senator,” is leading a bipartisan push for legislation that sets a global regulatory standard for digital assets while preserving a global competitive advantage for the United States.
New Bitcoin is issued in a block subsidy, with the amount of each block determined by an algorithm in the blockchain source code. The Halvening is a pre-programmed moment when Bitcoin’s block subsidy automatically gets cut in half, which occurs every 210,000 blocks, or roughly every four years.