Did Bitcoin Mining Cause the 2021 Blackout?

The ERCOT page owns Elliott, Heather, and Fern. It does not own this sentence. The job here is to stop a false one. It is not to argue that mining is harmless, and it is not to pretend no miner was using power in February 2021.

What failed in February 2021?

Plants froze, and fuel did not arrive. The Federal Energy Regulatory Commission, with the North American Electric Reliability Corporation, published the account this page uses: a February 2021 cold-weather event, also called Winter Storm Uri, caused outages, derates, or failures to start at generating plants across Texas and the South Central United States.^[1] ERCOT ordered a total of 20,000 megawatts of rolling blackouts to avoid a grid collapse. The release calls that the largest manually controlled load shedding in U.S. history. More than 4.5 million people in Texas lost power, some for as long as four days.^[1]

The cause shares in that release are generation, not a new class of customer. Freezing issues were 44.2 percent of the unplanned outages, derates, and failures to start. Fuel issues were 31.4 percent. Together, 75.6 percent. Natural-gas-fired units were 58 percent of the units that failed; wind 27 percent; coal 6 percent; solar 2 percent.^[1] Eighty-one percent of freeze-related outages happened at temperatures above the units' stated design temperature.^[1] The news release does not mention Bitcoin mining. This page has not re-read all 300 pages of the report, and does not claim the report's body is silent. The public summary of the finding is plants and fuel.

Which Texas mines were already hashing?

A few, and they were not the fleet the map now tracks. Bitmain announced on October 21, 2019 that it had launched a cryptocurrency mining farm in Rockdale to construct a 50 megawatt facility.^[2] That site is the one Bitdeer later operated, on the Rockdale land. It was online before Uri. Layer1, the Peter Thiel-backed project, began mining at a West Texas facility in February 2020, a year before the storm.^[3]

Those two facts are enough to reject a cleaner story than the record supports. Mining load was not zero in February 2021. This page does not have a sourced megawatt reading for either site on the days ERCOT was shedding load. Absence of a meter reading is not a claim that the machines were off, and it is not a claim that they were large enough to explain 20,000 megawatts of load shed.

Which sites came online after the blackout?

The industrial build the mining map is known for is a post-Uri build. Riot completed its acquisition of Whinstone US on May 26, 2021.^[4] The close is three months after the storm. Whether Whinstone's own machines were hashing in February, before Riot owned them, is a separate fact. This page has not located a February 2021 operating record for that site, and does not invent one.

The rest of the familiar names are later still. Core Scientific's Denton contract was approved August 24, 2021, after Uri.^[8] The city utility that signed it was already carrying about $140 million of debt from buying emergency power during the storm.^[9] Cipher began hashing at Odessa on November 29, 2022.^[10] Galaxy agreed to buy Helios in Dickens County on December 28, 2022.^[5] Hut 8's King Mountain, in Upton County, is dated operational 2022.^[11] The later ERCOT programs that treat mines as a class of large flexible load, and the dates those programs were created, are on the ERCOT page. They come after this storm. They are not a feature of it.

Which storm does the $175,000 figure belong to?

Not one this page will name. A New York Times article dated April 9, 2023, “The Real-World Costs of the Digital Race for Bitcoin,” is the piece secondary accounts quote for a payment of about $175,000 an hour related to Bitdeer, and more than $18 million over four days.^[6] The Times article did not render when this page was written. An April 2023 publication date does not by itself prove the payment was or was not during Uri. Retrospective articles exist. So do later storms.

What this page will not do is accept the paste. Indexed text of a Week article attaches that Bitdeer figure to Winter Storm Uri.^[7] The Week body did not render either. A search-index sentence is not an award notice, and it is not a storm assignment. Elliott, in December 2022, is the first winter storm for which this site has re-read operator accounts of Texas mines powering down. Those dollars live on the Bitdeer page and the ERCOT page. They do not get moved onto February 2021 to fill a hole.

The honest counterweight: some load is not the cause

A mine that was hashing in February 2021 was a load on a grid that failed. That sentence is allowed. Bitmain's Rockdale site and Layer1 were already in the state.^[2][3]Using power is not the same claim as causing a 20,000 megawatt load-shed whose official account is frozen equipment and fuel.^[1] Collapsing those two claims is how the false sentence gets made.

The later record cuts the other way, and this page does not hide it. After Uri, Texas recruited miners as controllable load, and miners were later paid, or credited, to come off the grid in other storms. That is a real controversy. It is Elliott, the August 2023 heat, Heather, Fern — storms with dates and documents on the ERCOT page. It is not Uri. A page that used those later payments to acquit mining of every grid complaint would be a defense. This one is a calendar.

Frequently asked questions

Sources

Every datable claim above is sourced below. This is a research and reference article, not an argument for or against mining.

1. [1] FERC — Final Report on February 2021 Freeze Underscores Winterization Recommendations (news release): Winter Storm Uri; ERCOT ordered 20,000 MW of rolling blackouts, the largest manually controlled load shedding in U.S. history; more than 4.5 million people in Texas lost power; freezing issues 44.2 percent and fuel issues 31.4 percent of the unplanned outages, derates, and failures to start
2. [2] Bitmain (PR Newswire) — launch of a mining farm in Rockdale, Texas, to construct a 50 MW facility (October 21, 2019)
3. [3] The Block — Peter Thiel-backed Layer1 begins mining at its West Texas facility (February 2020)
4. [4] Riot Blockchain (GlobeNewswire) — Riot Completes Acquisition of Whinstone US (May 26, 2021)
5. [5] Argo Blockchain — sale of the Helios facility in Dickens County to Galaxy (December 28, 2022)
6. [6] New York Times — The Real-World Costs of the Digital Race for Bitcoin (April 9, 2023). The article did not render for this page. Indexed descriptions attribute to it a figure of about $175,000 an hour paid regarding Bitdeer, and more than $18 million over four days. This page does not assign that figure to a storm.
7. [7] The Week — indexed text attaches the Bitdeer dollar figure to Winter Storm Uri. The article body did not render for this page, so that attachment is not treated as established.
8. [8] City of Denton — Legistar file 21-1364 (August 24, 2021): ordinance approving a power purchase agreement between the City and Core Scientific Inc.
9. [9] BuzzFeed News, Sarah Emerson — How Denton, Texas, embraced a crypto miner it didn't want (March 7, 2022): the August 2021 vote; Denton Municipal Electric's about $140 million of Winter Storm Uri debt
10. [10] Cipher Mining (GlobeNewswire) — Cipher Mining commences bitcoin mining at Odessa data center (November 29, 2022)
11. [11] Cleanview — Hut 8 King Mountain data center, Upton County (280 MW, operational 2022)