Crypto Miners' New Hustle: Get the State to Pay Them to Shut Down When It's Hot Out

This is outrageous.

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Crypto mining company Riot Platforms has revealed that it got $31.7 million in energy credits in August alone from Texas power grid operator ERCOT, CNBC reports — simply by cutting down on its massive energy consumption during a devastating heatwave.

In other words, the state's largest power supplier, which accounts for roughly 90 percent of the state's electrical load, effectively paid a crypto outfit to stop mining Bitcoin.

It's a bizarre new reality. Texas has been teetering on the edge of rolling blackouts this week. ERCOT recently issued the first emergency declaration since 2021, following soaring temperatures and power demand, with millions of people relying on air conditioning to survive the blistering heat.

Meanwhile, Riot only managed to mine 333 Bitcoin, the equivalent of around $8.9 million at the end of August, something that has primarily benefited the company.

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In light of brutal power surges, fluctuating energy prices, and blackouts, Texas lawmakers recently passed two bills incentivizing the mining industry to curtail their operations by essentially paying them more than the crypto they could've mined.

Riot is calling its new ruse of raking in energy credits by shutting down operations a big success.

"August was a landmark month for Riot in showcasing the benefits of our unique power strategy," said Jason Les, CEO of Riot, in a statement. "The effects of 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."

Despite the boasting, Riot's operations are a mere shadow of what they once were. While 2021 was a massive year for the company, with revenues soaring almost 8,000 percent per CNBC, the ensuing crypto crash in 2022 was a rude awakening, causing the company to lose half a billion dollars last year.

And the company hasn't fared much better lately, losing $27.7 million in the last quarter.

In short, is this really the best way to ensure the stability of a power grid? Whether anybody in Texas actually meaningfully benefits from all of this crypto mining, beyond generating jobs, remains unclear at best — especially when the practice has been shown to be incredibly harmful to the environment.

More on mining: Community Horrified by Plan to Burn Tires to Produce Bitcoin