The Texas senator spoke at the Texas Blockchain Summit in Austin last week and said that the Bitcoin mining industry could help to capture currently wasted energy and may be able to turn that energy toward the grid when it weakens.
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“Because of the ability of Bitcoin mining to turn on or off instantaneously, if you have a moment where there’s a power shortage in a power crisis, whether it is a freeze or some other natural disaster where power generation capacity goes down… they become excess reserves that can strengthen the grid’s resilience by providing a significant capacity of additional power to be available for critical services if and when it’s needed,” said Cruz during the conference.
Cruz added that he expects this transition to occur within the next five or so years where Bitcoin mining will play a larger role in the Texas energy grid.
“In five years, I expect to see a dramatically different terrain, with Bitcoin mining playing a significant role [in] strengthening and hardening the resiliency of the grid.”
Senator Cruz went into further detail on how and why such systems would work and said that much of the gas that is flared (burned off and not captured) is flared in Texas and that instead of wasting this gas it could be used for Bitcoin mining.
“Fifty percent of the natural gas in this country that is flared is being flared in the Permian [Basin] right now in West Texas,” Cruz said. “I think that is an enormous opportunity for Bitcoin, because that’s right now energy that’s just being wasted… Some of the really exciting endeavors that people are looking at is, ‘Can we capture that gas instead of burn it, use it to put in a generator right there on site, use that power to mine Bitcoin?’”
Cruz hinted that in times of crisis, Bitcoin miners could simply be turned off and that this excess power could be directed back toward the grid to meet demand.
Some Bitcoin proponents were caught off guard by the Senator’s understanding of both Bitcoin and how mining could work in the current energy ecosystem.
Nic Carter, a partner at Castle Island Ventures, the co-founder of Coin Metrics and an outspoken crypto activist, said that his jaw dropped when he heard Cruz’ take on Bitcoin mining.
“My jaw dropped while listening – he has the most enlightened perspective on the issue I’ve ever come across from a policymaker,” said Carter.
“I was surprised because I had spent months interviewing miners and energy experts for my talk and those were the exact points I settled on… You can imagine my shock when Sen Cruz demonstrated expertise around demand response, a pretty esoteric concept”
