Texas Legislators Support Bitcoin Mining Industry With New Bills

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Texas legislators have shown support for the bitcoin mining industry through the passing of two bills recently. While one bill awaits the governor’s signature, another was thwarted temporarily. Here’s a close look at the implications of these bills and the state’s position in the mining landscape.

Texas Legislation Signals Support for Bitcoin Miners

Texas legislators have shown support for the bitcoin mining industry as they passed two bills in the legislative session. These bills, SB 1929 and HB 591, await Governor Greg Abbott’s signature and will come into effect on September 1.

SB 1929 focuses on miners with energy capacity exceeding 75 megawatts (MW) and requires them to register as large load operators with the Public Utilities Commission (PUC) of Texas.

The data of these registered miners is subsequently shared by the Public Utilities Commission (PUC) with the Electricity Reliability Council of Texas (ERCOT), an entity overseeing the grid’s operations.

This legislative measure effectively coincides with ERCOT’s Large Flexible Loads Taskforce’s interim interconnection process, which was devised in March 2022. The primary objective of this process is to govern substantial electricity demands, including those arising from Bitcoin mining activities.

In contrast, the governor received HB 591 in April, a bill that seeks to provide tax exemptions for companies that make efficient use of previously squandered gas resources, including data centers.

By enacting these bills, Texas showcases its dedication to becoming an advantageous hub for bitcoin, blockchain, and digital assets, as emphasized by Lee Bratcher, president of the Texas Blockchain Council (TBC).

The Defeat of the “Anti Bitcoin Mining Bill” and Future Prospects

While the first two bills express backing for the bitcoin mining sector, a third bill known as SB 1751, nicknamed the “anti bitcoin mining bill,” did not advance beyond the committee stage.

This particular bill sought to impose restrictions on the industry’s involvement in demand-response programs that promote energy conservation by encouraging miners to scale back their operations during periods of heightened energy consumption.

Although the bill did not face direct opposition, it suffered from a lack of prioritization and time constraints, leading to its unaddressed status as the session drew to a close. However, there is potential for its reemergence in the subsequent session scheduled to commence in January 2025.

The threshold for registering with state grid authorities, as proposed in SB 1751, would have been set at 10 MW.

Despite this setback, Dennis Porter, who heads the industry advocacy group Satoshi Action Fund, emphasized the positive aspects of increased communication with the PUC and ERCOT, which would enhance transparency and publicly available data on mining.

Texas, with its abundant and affordable energy supply and favorable regulatory environment, has become one of the largest bitcoin mining centers globally. While federal policy on bitcoin mining remains limited, Texas, as the leading energy-producing state in the U.S., is forging ahead with its own rules and regulations. Notably, other states such as Arkansas and Montana have also passed legislation supporting mining.

On the other hand, there are states like New York that have put in place a two-year ban on establishing new bitcoin mines powered by fossil fuels. Additionally, Oregon is presently engaged in discussions regarding legislation that would mandate data centers, including miners, to actively reduce their emissions of greenhouse gases.

Meanwhile, the Biden administration’s proposal for a 30% tax on bitcoin mining has encountered obstacles and seems to have stalled. The tax did not make it into the bill concerning the debt ceiling, which was successfully passed. Representative Warren Davidson suggests that the tax is unlikely to resurface as part of the U.S. budget.

Bitcoin Mining Difficulty Soars to Record-Breaking 51.23 Trillion

Bitcoin’s mining difficulty has witnessed a notable upswing, as recent data indicates a substantial 3.4% surge at block height 792,288.

This surge propels the difficulty beyond the unprecedented 50 trillion threshold, reaching an all-time high of 51.23 trillion. As a result, miners now face a fresh challenge in their quest for rewards through successful block mining.

With approximately 373 exahash per second (EH/s) committed to the Bitcoin blockchain, the network’s hashrate has experienced consistent growth. Notably, on May 2, 2023, at block 787,895, the hashrate reached an all-time high of 491.15 EH/s.

The latest difficulty adjustment occurred at block height 792,288, witnessing a notable 3.4% increase. This adjustment propelled the difficulty from 49.55 trillion to its current level of 51.23 trillion after the surge on Wednesday. Bitcoin’s difficulty surpassing the 50 trillion milestone is a significant feat, as the computed hash must now fall below this figure for successful block mining.

The escalating difficulty indicates that finding a BTC block has become increasingly arduous, demanding enhanced computational power and resources.

The leading position in terms of hashrate contribution to the network is currently held by Foundry USA, with 114.75 EH/s, accounting for 30.26% of the total hashrate as of May 31. Other notable mining pools include Antpool with 79.75 EH/s, F2pool with 55.34 EH/s, Binance Pool with 34.99 EH/s, and Viabtc with 29.30 EH/s.

The network’s average hashrate across the last 2,016 blocks hovers around 366 EH/s. The next difficulty adjustment is scheduled to occur around June 14, 2023.

Despite the increasing challenge of mining difficulty, bitcoin miners continue their operations without faltering, and the overall network hashrate remains steadfast. This determination highlights the consistent and unyielding trend of mining activity within the Bitcoin ecosystem.

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