Bitcoin Miner Riot Blockchain Earned $9.5M for Curtailing Operations in Texas

UTC by Tolu Ajiboye · 3 min read
Bitcoin Miner Riot Blockchain Earned $9.5M for Curtailing Operations in Texas
Photo: Depositphotos

Riot Blockchain reduced mining operations in Texas last month, as the state coped with surging energy demand amid a heatwave.

Bitcoin mining company Riot Blockchain reportedly cut its mining operations by 28% last month at its Texas facility upon request from the state. The July operational drawdown was caused by the heatwave in Texas, leading to a surge in demand for energy. Reportedly, energy consumption also increased.

According to reports, Riot cut out 11,717-megawatt hours in July, essentially lowering its power costs. Put in perspective, the total amount of energy cut can power 13,121 average homes for a month.

By agreeing to the state’s request and operating at a reduced capacity, Riot Blockchain earned a $9.5 million reward, paid in power credits and other benefits. The reward is worth nearly 439 BTC based on the crypto’s July price of $21,634.

The Texas state reward is more than enough compensation for Riot Blockchain’s 28% BTC production. Due to the reduction, the company mined a total of 318 tokens last month. During the same period last year, the company mined 443 tokens.

Riot Blockchain CEO Weighs In on Texas Energy Cut Back

Commenting on Riot’s decision to assist the state of Texas with its energy crisis by giving power back to the overwhelmed grid, CEO Jason Les said:

“As energy demand in ERCOT (Electric Reliability Council of Texas) reached all-time highs this past month, the company voluntarily curtailed its energy consumption in order to ensure that more power would be available in Texas.”

Furthermore, Les also stated:

“[Riot Blockchain] has consistently and proactively pursued low-cost, large-scale access to power under its long-term fixed-rate power contracts, providing it with a unique ability to support ERCOT and release capacity back into the grid when power demand in Texas is high.”

In addition to lowering energy consumption in July, Riot took other measures to save costs. For instance, the company reportedly relocated miners hosted on Coinmint to its Whinstone Facility in Rockdale, Texas. As a result of this move, around 2,146 miners were offline. Furthermore, Riot was also able to do away with all third-party hosting fees.

At the moment, Riot’s hashrate is 4.2 exahash per second (EH/s). The company expects this mining capicity to hit 12.5 EH/s by Q1 2023.

Other Crypto Miners Also Reduce Operations amid Sweeping Heatwave

Riot was not the only crypto miner to cut back on mining operations amid pervasive heat waves throughout the US. Several other Bitcoin mining companies also halted operations to make more energy available for surging demand. Furthermore, the Texas payout is part of a rewarding demand response program available to miners in the Lone Star State. Reports state that other Texas-based crypto miners, including Core Scientific and Argo Blockchain, also reduced operations to help the state’s energy grid.

In addition to the bonus and revenue haul realized, Riot also sold 275 Bitcoin in July. At the time, this generated $5.6 million for the crypto mining company. The miner currently holds 6,696 self-mined BTC.

Riot’s shares have dropped by about 65% this year.

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