- Miners who bought cheap power and sold it at a premium have been able to cover much of their losses due to the closure of mining plants.
Texas crypto miners found a new way of earning profit: stopping mining Bitcoin (BTC) amid the infernal heat wave that began in early July and is scorching residents of the Lone Star State.
Since the middle of last month, almost all miners have halted operations on their farms, due to the unprecedented severe energy crisis and extreme heat affecting the state. But for some of them, it became more than just an act of solidarity.
This was the case for Riot Blockchain (NASDAQ:RIOT) Inc, a publicly traded crypto mining company, that earned approximately $9.5 million in credits after shutting down its BTC mining equipment last month.
Sale of Energy to Compensate for Losses
The mining company did not completely paralyze its activities since it managed to extract 318 bitcoins that month.
The company owns a 750-megawatt mega-facility in Rockdale in Texas and is preparing to build another one-gigawatt plant. This would make the two Riot Blockchain farms the largest bitcoin facilities in the world.
Even though energy prices skyrocketed with the Texas electricity crisis and mining company operations were unprofitable, for miners who had bought and stockpiled electricity at low prices, it was.
Large companies sold part of their electricity reserves at a higher price so that the state could face the power shortage. The Electric Reliability Council of Texas (ERCOT), which operates most of the state’s power grid, asked residents and businesses to cut power consumption.
Taking a Cue from Riot
This year the fall in BTC prices and high energy costs as a result of the war in Ukraine, which have affected the income of crypto mining companies.
To the point that the largest miners have had to sell part of the cryptocurrencies produced to obtain cash and continue financing the expansion projects that had been planned in the midst of the cryptocurrency bull run.
Other miners are likely to follow Riot’s lead and cover part of their losses following the halt in operations by selling energy at a higher price. Everything will depend on the agreement reached with the government.
Riot is part of the state-owned energy company ERCOT’s Four Confident Peak program. The program calls for the company’s 750-megawatt Whinstone plant to reduce its energy consumption during the summer months when power demand increases.
The company made a net profit of about $6.6 million, after selling 275 mined bitcoins. During July, Riot mined 318 BTC, which was a decrease of nearly a third from June production, according to company data.