• 278 days Will The ECB Continue To Hike Rates?
  • 278 days Forbes: Aramco Remains Largest Company In The Middle East
  • 280 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 680 days Could Crypto Overtake Traditional Investment?
  • 684 days Americans Still Quitting Jobs At Record Pace
  • 686 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 689 days Is The Dollar Too Strong?
  • 690 days Big Tech Disappoints Investors on Earnings Calls
  • 691 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 692 days China Is Quietly Trying To Distance Itself From Russia
  • 693 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 696 days Crypto Investors Won Big In 2021
  • 697 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 698 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 700 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 700 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 703 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 704 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 704 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 706 days Are NFTs About To Take Over Gaming?
Are Bitcoin’s Environmental Risks Overblown?

Are Bitcoin’s Environmental Risks Overblown?

Bitcoin has received a lot…

How Fintech Will Get Skeptics Into Crypto

How Fintech Will Get Skeptics Into Crypto

Airline miles and hotel points…

Josh Owens

Josh Owens

Writer, Safehaven.com

Josh majored in International Relations at the University of Edinburgh and is currently the Content Director at Oilprice.com. Josh has over 6 years of writing…

Contact Author

  1. Home
  2. Cryptocurrencies
  3. Bitcoin

The Bitcoin Miner That Is Paid To Do Nothing

Bitcoin Miners

In 2017, bitcoin burst into the global consciousness when it soared from below $1,000 to nearly $20,000. It then just as quickly dropped out of the limelight as it crashed to below $4,000 and investors began to doubt claims that it would become the global currency of the future.

But while bitcoin may have dropped off the front pages, the cryptocurrency itself and the mining industry behind it are very much alive and kicking. Bitcoin miners, which saw a wave of bankruptcies when prices crash in 2018, are expected to return to profitability this year. The majority of those miners will maximize their profits by building their heat-producing mining computers in a cold climate and close to a cheap source of energy. But one innovative company in West Texas is doing things differently.

Layer1, a startup backed by billionaire Peter Theil, set up its operations in one of the hottest states in the country, and now it is making money even when it’s computers are turned off. The secret to this company’s success has been its ability to turn its mining operations into massive bitcoin batteries that will sell power back to the grid when there are demand shocks. In summer, Texas can see a doubling of its peak electricity use, which puts utilities in the state under massive strain. During these peaks, Layer1 will switch off its mining operations and allow its 100mw load to flow to the grid. In return for this service, the company receives an annual premium equating to roughly $17 million. That reduces Layer1’s all-in power price by 75 percent, meaning the company pays just 10 percent of what residential customers would pay for energy. While that may seem like a massive premium to pay as insurance against demand spikes, it remains cheaper for the grid operators than building a new power plant or installing a battery to have on standby. 

With an annual energy footprint slightly larger than that of Switzerland, bitcoin miners the world over may soon consider acting as a backup to energy grids that face seasonal spikes. Texas, which is both the largest oil-producing state and the largest wind energy-producing state in the United States has plenty of cheap energy for miners to take advantage of. And with its major electricity demand spikes in summer, it seems bitcoin miners may soon have to reconsider where they are setting up shop.

By Josh Owens for Safehaven.com 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment