What exactly is cryptocurrency, and what does it have to do with the Texas power grid?

Cryptocurrency is a cash-like electronic payment system people use to pay each other for services, products — really anything — that effectively cuts out the middleman. Our cash is regulated by the U.S. government and our credit cards are regulated by companies, for example, but with Bitcoin and other popular cryptocurrencies, transactions are regulated by a decentralized network of users.

That’s where mining comes into play: to regulate Bitcoin transactions, they must be validated, and miners across the globe are competing with each other to validate transactions and enter them into the public ledger of all Bitcoin transactions.

If miners successfully validate a “block” of transactions, they’re rewarded 6.25 newly minted Bitcoins, each worth about $50,000, according to The New York Times (though that $50,000 value often fluctuates).

The process of mining consumes an enormous amount of energy, as you need highly specialized machines, lots of space and enough cooling power to keep the machines from overheating. Miners often flock to where there’s an abundance of cheap power and wide-open spaces, hence their attraction to the Lone Star State.

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