Bitcoin Miner Riot Earned $9.5M for Shutting Down During Texas Heatwave

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Decrypt
16w ago2022-08-03

Riot blockchain paused mining operations at its Texas facility last month upon request from the state—and was handsomely rewarded.

The industrial crypto miner, according to a company statement on Wednesday, earned roughly $9.5 million in power credits for its curtailment activity—roughly 439 Bitcoin, based on the average July price of $21,634.

The reward more than compensates for Riot’s underwhelming production of 318 Bitcoin last month, down 28% from the 443 mined in July 2021.

The payout comes as part of a demand response program available to miners in Texas that rewards them for giving power back to the grid when demand threatens to overwhelm the system. Such an event occurred on July 8 when a statewide heatwave pushed power consumption to a record high 78,206 megawatts, according to Bloomberg.

As such, when The Electric Reliability Council of Texas (ERCOT) called on state residents to conserve energy wherever possible, nearly every industrial-scale miner answered the call. Collectively, the miners helped return to the grid over 1,000 megawatts in mining load.

Riot said it curtailed 11,717-megawatt hours in July—enough to power 13,121 average homes for one month. 

“The Company 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,” explained CEO Jason Les.

The company sold 275 Bitcoin in July—generating $5.6 million—and as of July 31 had 6,696 Bitcoin on hand.

Major mining firms including Core Scientific were forced to dump most of their Bitcoin holdings in June to “enhance liquidity,” as Bitcoin’s plummeting price scorched miners’ profit margins. That led to the network’s hash rate trending slightly downwards since June, according to Blockchain.com data.

Nevertheless, Riot still has a “deployed fleet” of 40,311 miners with a hash-rate capacity of 4.2 exahashes per second—close to 2% of Bitcoin’s entire hash rate.

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