Over the summer, the Republican governor bragged about signing a “law for Texas to create a master plan for expanding the blockchain industry” and noted H-E-B is placing cryptocurrency kiosks in certain stores. Last week, Abbott upped his crypto-cred by reposting an old photo with Tesla co-founder and Dogecoin pied piper Elon Musk.
Then on Tuesday, Abbott announced that he’d snagged a key endorsement in his bid for reelection.
“Texas is the land of opportunity & innovation,” he wrote in a tweet. “I’m proud to receive the endorsement of the Texas Blockchain Council. The Lone Star State is poised to be a world leader in blockchain & cryptocurrency.”
The Texas Blockchain Council is a Bitcoin mining business lobbying group, but if you’re like us, the very definition of “blockchain” is a bit fuzzy. Crypto website ZebPay describes it as a type of technology that stores various kinds of information, including records of cryptocurrency transactions.
Texas is the land of opportunity & innovation.— Greg Abbott (@GregAbbott_TX) February 8, 2022
I’m proud to receive the endorsement of the Texas Blockchain Council.
The Lone Star State is poised to be a world leader in blockchain & cryptocurrency.@txblockchain1 pic.twitter.com/WnMQUdhkOG
Many on the cutting edge of digital currency are thrilled by Abbott’s efforts to incentivize the blockchain industry. But other experts are sounding the alarm that such moves could put enormous strain on Texas’ already creaky power grid, which during last February’s winter storm was “seconds and minutes away” from leaving residents in the dark for months.
During an event in October, Republican Sen. Ted Cruz suggested that Bitcoin could actually work to give Texas’ energy infrastructure a boost. Cruz noted that miners can quickly go offline amid peak demand, moving energy back to the power grid, according to CNBC.
“If you have a moment where you have a power shortage or a power crisis, whether it’s a freeze or some other natural disaster where power generation capacity goes down, that creates the capacity to instantaneously shift that energy to put it back on the grid,” he said.
Not everyone sees it that way. Ben Hertz-Shargel, who works for Wood Mackenzie, which provides commercial intelligence for the natural resources sector, told the same outlet that even though Bitcoin could potentially double demand growth, it’s not necessarily a good thing.
“The analogy I like to use is that if you start smoking two packs a day and then cut back to one pack on holidays, that doesn’t make smoking good for your health,” he said.
Abbott insists that Bitcoin mining will work to encourage the power industry to ramp up production. But so far, two miners have agreed to voluntarily pause operations when asked, according to Bitcoin and Ethereum news site Decrypt.
Certain countries have imposed similar restrictions on miners.
Mining operations have been banned during the winter to prevent blackouts in Iran, and China has cracked down on cryptocurrencies, Decrypt reports. Kosovo outlawed Bitcoin mining entirely after grappling with higher energy prices and a winter power shortage.
Currently, Texas Blockchain Council counts at least 27 miners in the state.