# Texas cryptomining outfit earns more from idling rigs than digging Bitcoin

**URL:** https://teo9i.com/t/texas-cryptomining-outfit-earns-more-from-idling-rigs-than-digging-bitcoin/5999
**Category:** Science & Technology
**Tags:** crypto
**Created:** [September 8, 2023, 12:52pm UTC](https://teo9i.com/t/texas-cryptomining-outfit-earns-more-from-idling-rigs-than-digging-bitcoin/5999 "2023-09-08T12:52:56Z")
**Posts on this page:** 1
**Page:** 1

<div class="post-metadata">

### Author: ![REALITY](https://teo9i.com/user_avatar/teo9i.com/reality/32/25124_2.png) [@REALITY](https://teo9i.com/u/REALITY)
#### Post date: [September 8, 2023, 12:52pm UTC](https://teo9i.com/t/texas-cryptomining-outfit-earns-more-from-idling-rigs-than-digging-bitcoin/5999/1 "2023-09-08T12:52:56Z")

</div>

# It’s not a broken business model if the subsidies make up for cratering market and flagging demand.

 ![](https://teo9i.com/uploads/default/original/3X/b/8/b85e1cc4f3108fde1ddbf5fefda9ed59bbf3626f.jpeg)  
Bitcoin mining outfit Riot Platforms earned $31.7 million from Texas power authorities last month for curtailing operations – far more than the value of the Bitcoin it mined in the same period.

In a press release yesterday, Riot said it produced 333 Bitcoin at its mining operations in Rockdale, Texas, which would have been worth just shy of $9 million on August 31. All the cash earned from those energy credits, on the other hand, equates to around 1,136 Bitcoin, Riot CEO Jason Les [said](https://www.riotplatforms.com/news-media/press-releases/detail/159/riot-announces-august-2023-production-and-operations-updates) in the company’s monthly update.

“August was a landmark month for Riot in showcasing the benefits of our unique power strategy,” Les said. "Riot achieved a new monthly record for Power and Demand Response Credits … which surpassed the total amount of all Credits received in 2022.

“These credits significantly lower Riot’s cost to mine Bitcoin and are a key element in making Riot one of the lowest cost producers of Bitcoin in the industry,” Les said.

The Electric Reliability Council of Texas (ERCOT) operates a demand response [program](https://www.ercot.com/services/programs/load) that allows big energy consumers, like Riot, to earn power credits for using less of it for operations and selling power back to the grid, as well as additional credit for being enrolled in its demand response programs.

As we [reported](https://www.theregister.com/2022/08/03/texas_bitcoin_power/) in August of last year, the company earned $9.5 million in credits during a July 2022 heatwave as well – still far less than it earned in Texas’s [hottest August on record](https://www.expressnews.com/san-antonio-weather/article/texas-hottest-august-ever-recorded-18340522.php) this year.

Energy prices have been generally up, and [aren’t](https://www.cbsnews.com/news/inflation-electricity-bills-higher-summer-2023/) coming down, but you know what _has_ deflated? The price of a Bitcoin. Sure, the price of 1 BTC has been [up](https://www.google.com/search?q=btc&oq=btc&aqs=chrome..69i57j69i59j69i64j0i131i433i512j0i131i433i650j0i131i433i512l2j0i433i512.673j0j7&sourceid=chrome&ie=UTF-8) from the depths it plumbed late last year, but hovering in the mid-$20k range all year is nothing like the heady late-2021 highs of near $70k per coin.

The combination of inflated electricity costs and a drop in the value of Bitcoin means mining simply isn’t as profitable as it was in 2021, the year Riot’s revenue [soared](https://www.riotplatforms.com/investors/sec-filings/annual-reports##document-4476-0001079973-22-000280-2) as demand for, and the value of, Bitcoins rose.

Fast forward just a year and things began looking [different](https://www.riotplatforms.com/investors/sec-filings/annual-reports##document-4653-0001558370-23-002704-2). Losses followed as Bitcoin prices plummeted and trade volume started to shrink – a problem that has only [continued](https://www.reuters.com/technology/cryptoverse-bitcoin-miners-get-stuck-bear-pit-2022-09-27/) in the crypto world.

Analysts see Bitcoin miners [struggling](https://www.cnbc.com/2023/09/06/texas-paid-bitcoin-miner-riot-31point7-million-to-shut-down-in-august.html), and JPMorgan Chase said recently that the market cap of the largest Bitcoin mining firms in the US dropped by 21 percent in August. Surprise, surprise – Riot, with a 39 percent drop in market cap over the month, was the worst hit. While Riot’s stock is up this year, like Bitcoin its value has dropped precipitously since 2021, when the mining firm peaked at [$71.33](https://www.nasdaq.com/articles/3-bitcoin-stocks-that-could-crash-31-to-66-according-to-wall-street-2021-02-23) a share. Today it’s worth just $11.10.

But if ERCOT is going to pay the market mWh rate for _not_ mining, it can’t be that bad of a business model.

Neither ERCOT nor Riot responded to questions for this story.

> **[Texas miner earns more from idling rigs than digging Bitcoin](https://www.theregister.com/2023/09/07/texas_crypto_mining_outfit_energy/)**
>
> It's not a broken business model if the subsidies make up for cratering market and flagging demand