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How Riot Blockchain capitalized on a hot Texas summer to make more money selling power than mining crypto

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How Riot Blockchain capitalized on a hot Texas summer to make more money selling power than mining crypto


On August 3, Riot Blockchain––one of many world’s largest Bitcoin miners––issued an replace on its operations for July that headlined an astounding end result: Riot generated simply as a lot or more cash not producing cash as by minting its staple product.

It was a tough time for Bitcoin. Nevertheless it didn’t look that method from Riot’s banner efficiency. The flagship token’s value had dropped from over $40,000 in April to hover within the low $20,000s throughout most of July. You’d suppose that fall would have hammered Riot’s revenues. However not so: Riot benefited from what’s successfully a second, backup enterprise that doubled its gross sales over what it posted making its personal Bitcoin––the identical end result as if Bitcoin have been nonetheless promoting for $40,000! That profitable sideline consists of curbing output and getting paid for releasing the “standby” energy to stabilize the famously-stressed Texas grid. Among the many wealthy advantages: promoting that liberated electrical energy again to the community at such super-high costs that the in the course of the hours of closure, miners could make multiples the cash from hawking megawatts that they’d get minting cash.

Right here’s how the method labored for Riot in July. Beneath a regime known as “value response” administered by ERCOT, the company that manages the movement of electrical energy for Texas, Riot and fellow miners can select to close down and rechannel their freed-up megawatts to the grid at “spot” or market costs. In July, a heatwave scorched the Lone Star state, forming a “dome” that stilled the air over the windmill farms that furnish an enormous share of the state’s vitality. On the similar time, electrical utilization hit all-time highs as Texans cranked up their AC models. For a lot of hours, spot costs soared so excessive that Riot might promote energy to Ercot for 50 or extra occasions the low mounted value it was paying for juice to spawn Bitcoin.

Riot and different producers additionally mine {dollars} from no fewer than three different Texas “demand response” plans that both pay for curbing electrical energy in emergencies, or scale back its transmissions prices. By darkening its knowledge facilities for hundreds of hours this summer season, Riot pocketed a windfall from these packages that reward miners handsomely for offering reserve energy that helps make sure that the grid runs easily.

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Because of the stoppages, Riot produced simply 318 Bitcoin Bitcoin in July, one-fifth fewer than the 402 it might have generated working at full blast. Therefore, income from the Bitcoin that Riot produces for its personal account amounted to $6.9 million on the signature cryptocurrency’s common value of $21,634. However Riot obtained much more {dollars} from shutting down. The demand response packages contributed a bonanza by way of $9.5 million in “energy credit,” funds that scale back the price of electrical energy that constitutes the huge bulk of its gross mining invoice. Riot doesn’t specify which “demand response” packages clinched the credit. However Lucas Pipes, an analyst for B. Riley, reckons that promoting megawatts again to the grid at these massive spot charges underneath “value response” accounts for many of the good points.

Throughout these 31 days, Riot bought that extra cash for closing manufacturing for 11,717 megawatt hours, or round 14% of its ordinary working time. All instructed, between its Bitcoin output and vitality gross sales, Riot logged income of $16.4 million for July. Needless to say Riot additionally sacrificed Bitcoin output in alternate for promoting energy. Had Riot pumped 24-7 and hatched these extra 84 Bitcoin, it might have amassed $8.7 million from mining as a substitute of the $6.9 million it notched. So by shutting down and diverting electrical energy as a substitute, Riot registered a web achieve of $8.1 million (the $16.4 million it made minus the $8.7 it might have garnered from not promoting energy and simply making Bitcoin), or over 90%.

In impact, the $8.1 million increase from the electrical energy gross sales equates to $964 for every of the 84 foregone Bitcoin. That’s 42% above its all-time excessive of round $680. From one other perspective, its whole income of $16.4 million for the month yields common value of $40,700 per coin based mostly on the 402 it might have made sans the closures. Put merely, by producing much less and promoting energy at enormous costs as a substitute, Riot (image: RIOT, market cap $1.3 billion) successfully reaped twice the worth per coin, based mostly on its potential output, than if it had minted at full capability. Every little thing’s massive in Texas, together with ten-gallon hats filled with dollars-for-powering-down its Bitcoin-friendly packages hand the miners.

Texas is now the world’s Bitcoin capital, and its packages richly profit the miners

Although the July stunner demonstrates how a lot the Texas vitality system can increase profitability, the extra {dollars} gained are deceptively small versus what Riot and different miners can harvest going ahead. Riot is main a crypto-rush that’s making Texas the world capital for Bitcoin mining. An enormous a part of the state’s attraction rests on the sundry packages that make miners numerous cash over and above the take from producing Bitcoin, in alternate for shifting energy to assist stabilize the grid. The latest drop in Bitcoin costs make these demand response bonuses way more invaluable to the miners. The extra Bitcoin slides, the extra hours placing megawatts available on the market yield increased income than minting Bitcoin––offering the miners a terrific technique of diversification, the marvel we simply witnessed at Riot.

A lot of Riot’s manufacturing went off-line just lately resulting from disruptions from its big growth initiative at its Whinstone facility north of Austin. That knowledge heart is believed to reign as the most important mining hub in North America. In July, Whinstone’s “self-mining” capability, the manufacturing for its personal account versus “internet hosting” at a charge for out of doors purchasers that present their very own tools, was round 110 megawatts. By early subsequent 12 months, Riot expects that in-house scale to triple to 350mw as a part of a aim to realize whole capability, together with internet hosting, of 750 megawatts.

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Riot’s additionally constructing a second, much more gargantuan, $333 million facility on a 265 acre web site in Corsicana north of Dallas. Anticipated to open in July of subsequent 12 months, Corsicana will surpass Whinstone at a measurement one gigawatt or 1000 megawatts. Immediately, Cambridge College places world community at 10 gigawatts. If that quantity stays fixed, Riot alone would management 17% of all of the world’s Bitcoin capability by mid-2023. Most of the greatest names in Bitcoin are homesteading as longhorns. Privately-held Bitdeer, managed by crypto pioneer Jihan Wu of China, is mining at a large, repurposed former Alcoa plant throughout the road from Whinstone. Core Scientific (CORZ; market cap: $1.1 billion) is constructing a brand new knowledge 300mw heart in Denton north of Dallas-Ft Price slated for completion in December. In Could, Argo Blockchain of London (NASDAQ: ARBK, market cap: $300 million) began manufacturing at its 200mw Helios heart on a 320 acre parcel in north Texas close to Lubbock. Argo’s additionally unveiled plans so as to add 600mw of manufacturing within the years forward.

ERCOT predicts that whole capability in Texas might attain properly over six gigawatts in 2023. After all, mining’s worldwide scale might develop properly above the present 10 gigawatts if the Bitcoin value rebounds strongly. But when mining exercise stays close to immediately’s ranges, Texas would host one thing like half or extra of the world’s Bitcoin business lower than a year-and-a-half from immediately.

At the moment of falling Bitcoin costs, the Lone Star state’s mega-bucks-for-miners packages is rewarding miners as if the growth occasions by no means ended.

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Texas AG sues Dallas for decriminalizing marijuana

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Texas AG sues Dallas for decriminalizing marijuana


Texas Attorney General Ken Paxton announced a lawsuit Thursday targeting the blue city of Dallas over a ballot measure that decriminalizes marijuana.

Paxton alleges that Proposition R, which “prohibits the Dallas Police Department from making arrests or issuing citations for marijuana possession or considering the odor of marijuana as probable cause for search or seizure,” violates state law.

The attorney general argues in the lawsuit that the ballot measure is preempted by Texas law, which criminalizes the possession and distribution of marijuana. Paxton also claims the Texas Constitution prohibits municipalities from adopting an ordinance that conflicts with laws enacted by the state legislature.

MORE AMERICANS SMOKE MARIJUANA DAILY THAN DRINK ALCOHOL, STUDY CLAIMS

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Texas Attorney General Ken Paxton speaks outside the U.S. Supreme Court on November 01, 2021 in Washington, DC. (Drew Angerer/Getty Images)

“Cities cannot pick and choose which State laws they follow,” Paxton said in a statement. “The City of Dallas has no authority to override Texas drug laws or prohibit the police from enforcing them.”

Paxton called the ballot measure “a backdoor attempt to violate the Texas Constitution” and threatened to sue any other city that “tries to constrain police in this fashion.” 

WHAT ARE THE TOP RISKS OF MARIJUANA USE?

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A flower bud of marijuana.  (AP Photo/Sakchai Lalit, File)

The lawsuit comes after interim Dallas Police Department Chief Michael Igo directed Dallas police officers not to enforce marijuana laws against those found to be in possession of less than 4 ounces. 

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Ground Game Texas, a progressive nonprofit group that campaigned in favor of the ballot measure, argued it would help “keep people out of jail for marijuana possession,” “reduce racially biased policing” and “save millions in public funding.” 

TEXAS AG PAXTON FILES CRIMINAL REFERRAL AGAINST DOJ FROM ‘SUSPICIOUS DONATIONS’ THROUGH DEMOCRATIC GROUP

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A mature marijuana plant begins to bloom under artificial lights at Loving Kindness Farms in Gardena, Calif., May 20, 2019. Paxton has sued the city of Dallas over a ballot measure that decriminalized possession of small amounts of marijuana.  (AP Photo/Richard Vogel)

“It’s unfortunate but not surprising that Attorney General Ken Paxton has apparently chosen to waste everyone’s time and money by filing yet another baseless lawsuit against marijuana decriminalization,” said Catina Voellinger, executive director for Ground Game Texas.

“Judges in Travis and Hays counties have already dismissed identical lawsuits filed there. The Dallas Freedom Act was overwhelmingly approved by 67% of voters — this is democracy in action.”

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Since January 2024, Paxton has filed lawsuits against five Texas cities that decriminalized marijuana possession, arguing these policies promote crime, drug abuse and violence. 



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Tre Johnson, Texas Longhorns Scrape Past Saint Joseph’s to Win Legends Classic

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Tre Johnson, Texas Longhorns Scrape Past Saint Joseph’s to Win Legends Classic


The Texas Longhorns are heading back to Austin with some early-season tournament hardware in hand.

Tre Johnson battled through another poor shooting night but closed the game out for Texas once again, scoring a game-high 17 points to lead the Longhorns to a 67-58 win over Saint Joseph’s at the Legends Classic championship round in Brooklyn Friday night.

Transfer guard Julian Larry sparked the Longhorns late, scoring all 12 of his points in the second half. Arthur Kaluma added 14 points, four rebounds and four assists while Kadin Shedrick had 10 points and six rebounds.

The Hawks were led by Rasheer Fleming, who stuffed the stat sheet with 16 points, 20 rebounds, three assists, two blocks and three steals. Xzayvier Brown added 15 points on 4 of 7 shooting.

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The Longhorns jumped out to an 11-6 lead after seven early points from Kaluma. St. Joe’s started out cold from the field but controlled the game with hard-nosed defense and the occasional press while dominating the offensive glass. This was highlighted by a possession where the Hawks got four consecutive offensive rebounds but only scored one point as a result.

Johnson stayed aggressive on offense for Texas but was off on his shot and was impacted by the on-ball defense of St. Joe’s.

Mark, Pope and Johnson all hit a triple for Texas in about a two-minute span ahead of halftime to give the Longhorns their biggest lead at 32-26 but the Hawks responded with a free throw from Haskins 3-pointer from Brown before halftime to cut the lead to 32-30.

The defense from the Hawks ramped up even more, as the Longhorns were stuck in the mud on offense and had little to no ball movement. St. Joe’s was hardly much better, but its defense continued to set the tone and eventually swung the momentum.

Larry then hit back-to-back triples as the two teams traded buckets on five straight possessions. Consecutive dunks from Ajogbor and Fleming but the Hawks in front 50-46 with 8:25 to play, but Larry continued to take over. He hit 1,000 career points with a driving layup before finding Kaluma for a corner triple to put Texas back in front at 51-50.

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It didn’t stop there for Larry, who found a cutting Shedrick for a dunk before diving on a loose ball down at the other end to secure possession for Texas, which had built a 55-52 lead with 3:13 left. The Longhorns used the momentum to put together an 8-0 run, which essentially sealed the win in a game where scoring felt hard to come by.

Johnson then closed the game out with six points in the final 4:11 of action, including a pullup jumper at the foul line to put Texas up 63-55 with 1:19 left.

Texas will host Delaware State on Nov. 29.

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UT System’s free tuition plan sparks resistance from some Texas lawmakers

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UT System’s free tuition plan sparks resistance from some Texas lawmakers


WASHINGTON — State Rep. Brian Harrison, R-Midlothian, said Friday he plans to meet with top University of Texas System officials after they announced a plan to provide free tuition and waived fees to students whose families make $100,000 or less.

While many elected officials have praised the initiative, Harrison criticized it as an “abuse of power” that makes Texas higher education “more socialist than California.”

Harrison said Friday he’s unswayed by statements from the system and supporters who say the move will be funded from university endowments, not taxpayers.

Harrison compared such statements to someone saying they’re removing water from the shallow side of a pool, not the deep end. It’s all the same water.

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“Money is fungible, so that doesn’t satisfy me in the slightest,” Harrison said.

‘Game changer’: UT System announces free tuition for qualifying Texas families

The new initiative is an expansion of the Promise Plus Program, a needs-based financial aid initiative, and comes amid widespread concerns about the impact of inflation and college costs on families. Gov. Greg Abbott recently prohibited Texas colleges and universities from raising tuition for the next two years.

UT System Chancellor James B. Milliken hailed the expansion as a “game changer” that will make “enormous, real difference” to improve college access for all Texans.

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Not everyone is a fan.

Harrison and like-minded House colleagues have compared it to President Joe Biden’s student loan forgiveness plan that drew intense blowback from conservatives and was largely struck down by the courts. They also said such a consequential change in policy should come from the elected lawmakers serving in the Legislature.

“There must be consequences,” Harrison said on X. “UT’s budget must be cut, and bureaucrats should be fired.”

He led 10 Republican lawmakers, most of them incoming freshmen, in a letter to the regents demanding answers to a litany of questions, including the price tag of the expansion and the source of that money.

“What specific statutory authority did the regents rely on to make a decision this consequential, which will have direct financial consequences for our constituents, many of whom are already struggling to put gas in their tanks and food on their tables?” the lawmakers wrote.

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UT System spokesman Paul Corliss has said the program is not funded through taxes or any kind of public subsidy.

“Rather it is funded through existing UT System endowments,” Corliss said.

What to know about qualifying for free tuition at UT System schools

Rep. Donna Howard, D-Austin, hammered that point in a response to Harrison on social media.

“There are no tax dollars involved,” Howard said on X. “Higher Ed institutions are already helping families afford college. This expands philanthropic endowments and helps meet affordability goals of [Abbott and the Texas Higher Education Coordinating Board].”

Harrison and his colleagues will have to contend with many members of the public embracing a plan that already is encouraging young people to adjust their higher education aspirations.

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Frank Whitefeather, a high school senior, stayed up until 2:30 a.m. Friday working on his college application essay.

He was freshly motivated after the announcement that students whose families make less than $100,000 annually will get free tuition and waived fees at the University of Texas at Austin and other schools in the UT System.

“I wouldn’t be in debt,” said Whitefeather, 17. “I wouldn’t have to have student loans.”

Could free tuition from the UT System impact the competition for Texas college students?

Whitefeather, who attends Dallas ISD’s Sunset High School, thinks the UT news also could change many of his peers’ lives. It’s already changing his plans. Whitefeather hopes to study engineering and be his own boss one day. Texas A&M and UT Austin were his top two choices, but the free tuition announcement has pushed UT ahead.

Harrison said the university system is being contradictory by simultaneously saying it has enough money to offer tuition-free education, but also that a tuition freeze could leave it cash strapped and require more funding from the Legislature.

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“I guarantee you they’re going to be requesting more tax money from the Legislature next session,” he said.



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