End of the Year Winter Strom in the US shows its Continued Importance for Bitcoin Mining

Over the years, the idea that the USA is an important player in the crypto domain did not drastically change. However, in the last couple of years, the public sentiment towards the mining of digital currencies took a turn towards what many analysts describe as a highly negative atmosphere. A big upswing in this approach came about in 2021 when Elon Musk publicly decried the bitcoin network for what he saw as a very high degree of energy expenditure. While many experts believe that this was due to other factors, including a possible desire to impact the price of this digital currency, the notion that cryptocurrencies spend too much energy in the US remains in place. 

Because of that, governments on a range of different levels, from state to federal, tried to clamp down on the production of digital tokens in the country. States like New York even introduced a moratorium on any new facilities and pressed hard on the existing ones to reduce their power consumption and the influence on the electrical grids. That is why many companies decided to move to other territories and find less pressure on keeping their operations going. But, the recent winter storm that hit the US shows that the same country still very much remains a center of digital currency production. In other words, even with the negative business and social climate, many digital mining ventures are still working in the same nation. 

Extra Bomb Cyclone

The winter weather in the US is not simply a series of cold days that beset the country, but a full-on extra bomb cyclone. A bomb cyclone, also known as explosive cyclogenesis, is a meteorological phenomenon that occurs when a low-pressure system intensifies rapidly. This rapid intensification is characterized by a drop in atmospheric pressure over a 24-hour period. Bomb cyclones can occur at any time of year, but they are most common in the winter months when the temperature contrast between the cold polar air and warmer air from the tropics is greatest – the same conditions began to appear in North America in the middle of December. 

Extra-tropical bomb cyclones, also known as mid-latitude or baroclinic bomb cyclones, are formed when a low-pressure system intensifies as it moves along a frontal boundary between the cold polar air and warmer air from the tropics. These types of bomb cyclones often produce strong winds and heavy precipitation, leading to winter storms, just like the one that descended on the US. The result is a series of calamities, but also an industry-wide shutdown in the cryptocurrency mining domain. 

Strom Impact

For days, the US media warned that the impact of the storm will be severe. In theory, during a winter storm, the bomb cyclone can bring strong winds, heavy snow, and freezing rain to the affected region. These storms can also cause coastal flooding and erosion due to the strong winds and high waves. Winter storms can be dangerous and disruptive.

This time around, the US authorities underlined that it is important to take precautions to stay safe during a winter storm, such as staying indoors, avoiding travel, and keeping an emergency kit on hand. Despite this, more than 50 individuals lost their lives and the death toll will continue to rise. But, the crypto mining industry decided to act preemptively and take their mining rigs off the network.

Crypto Miner Response

Cryptocurrency mining facilities, like any other business, should have a disaster response plan in place to protect their equipment and operations in the event of extreme weather or other natural disasters. If possible, crypto mining facilities should try to secure their equipment, such as by placing it on higher ground or in a secure, weather-resistant location. Power outages can be a major concern during extreme weather events, so crypto mining facilities should take steps to protect their power supplies. This might involve using backup generators or battery systems to keep the equipment running, or even a full facility shutdown. Crypto mining facilities should closely monitor their equipment for any signs of damage or failure during the storm, which can easily include even ocean storm surges, like the ones that already occurred on the Eastern seaboard. To help in the process of oversight, crypto ventures might involve plans for using remote monitoring systems or having staff check on the equipment regularly, as long as their physical safety is not jeopardized. 

Lastly, crypto mining facilities should have a disaster response plan in place and should follow any emergency procedures that have been established to protect the equipment and operations. However, once the storm severity became extreme, the crypto ventures went for a bigger financial hit but smaller physical risk – they shut down their rigs. The result is that the bitcoin mining hash rate went down 40 percent during the initial impact of the storm. This is known as curtailment and it helped the local communities stabilize their power grids during the maximum demand period around Christmas. In Texas alone, 99 percent of the crypto mining industry shut down at one moment. The impact was seen across the globe and felt by esports players, crypto whales, and anyone else using the network. 

US Crypto Mining Influence

It is difficult – if not impossible – to precisely determine exactly how much of the global cryptocurrency mining industry is located in the United States. The industry is decentralized and there is no central authority that tracks this information or estimates it precisely. However, the United States is home to a significant number of cryptocurrency mining operations and the shutdown shows that it should still be considered one of the major centers of the global cryptocurrency mining industry. 

The distribution of cryptocurrency mining operations around the world is always influenced by a variety of factors, including the availability of cheap electricity, the cost of land and other infrastructure, and the local regulatory environment. In the United States, these factors remain positive overall and have thus attracted a number of cryptocurrency mining operations. That applies in particular to states with cheap electricity, such as Washington and Montana. But, other states also still have a significant presence of crypto mining companies and the near future, even with challenges like the winter storm of 2022, will not change that.

Source: Coindesk