Digital Assets: Riot Blockchain Raked In $31.6M In Texas Energy Credits During The August Heat Wave
Riot willingly reduced its energy consumption to capitalize on available credits.
In August 2023, Riot Blockchain Inc (NASDAQ: RIOT), a Texas-based bitcoin mining company, experienced a significant boost in revenues, primarily driven by Demand Response Credits and power credits. Despite producing 11% fewer bitcoins compared to the same month in 2022, Riot witnessed a staggering 2,933% year-on-year increase in Demand Response Credits. Revenues generated from power credits soared by 709%, resulting in a total of $31.6 million in combined revenues from energy credits.
During this period, Riot mined approximately $9.5 million worth of bitcoin, assuming an average August bitcoin price of $28,617 per bitcoin. Additionally, the company sold 300 bitcoins, earning proceeds of $8.6 million at an average selling price of $28,617, which was significantly lower than the revenues generated from power credits. (Proactive Investors)
Riot’s CEO, Jason Les, emphasized the significance of their unique power strategy, which significantly lowered the cost of mining bitcoin, making Riot one of the most cost-effective bitcoin producers in the industry. He highlighted that this power strategy, combined with their financial strength and efficient miner fleet, positions Riot as a leader in anticipation of the upcoming Bitcoin ‘halving’ event.
Texas faced extreme temperatures in August, leading to a surge in electricity demand, at times surpassing the available supply in the state. Riot played an active role in easing the burden on the Electric Reliability Council of Texas (ERCOT), which is responsible for managing the state’s electrical grid. This involvement resulted in the acquisition of significant energy credits.
Texas has emerged as a prominent location for bitcoin mining, especially following regulatory changes in other areas. The power credit system implemented by ERCOT has been a crucial factor in drawing miners to the state. While there have been attempts to exclude bitcoin miners from certain benefits, the House rejected such efforts.
It’s worth noting that bitcoin mining is energy-intensive and can strain power grids, particularly during high-demand periods. Riot’s success in leveraging power credits highlights the company’s strategic advantage in this competitive industry.
Related Story: GDA’s New 8 MW Bitcoin Mining Facility In Sweden To Run On Clean Hydro Energy
Photo by Andrey Metelev on Unsplash
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