Executive at Hut 8 Mining Corp
- Bitcoin mining unit economics, highlighting OPEX and CAPEX
- Adaptability of transitioning to mining other cryptocurrencies, noting regulatory considerations
- Energy dynamics – cost overview, immersion vs air cooling and key regions with low energy costs
- Proof-of-stake vs proof-of-work, including energy use implications
What are the unit economics behind bitcoin mining?
What’s the typical CAPEX on a mine? How much do you have to spend to get a mine up and running?
Have supply-side disruptions and shortages impacted the cost of acquiring mining equipment?
If you’ve invested in a lot of ASICs [application-specific integrated circuits], and you’ve spent USD 100m standing up this mine, how long will that equipment typically last? What’s the typical life cycle?
Do you think the price of bitcoin can help drive semiconductor innovation?
What’s the cost differential on immersion vs air cooling?
Do you think there’s a correlation between machine cost and mining ability?
You’re saying some miners have a base cost of USD 7,000-10,000 per bitcoin, and others much higher at USD 17,000-20,000. What’s the split between those two varieties?
What do you think the average recoup time on CAPEX would be at the moment?
What alternative lines of business would miners have?
How do hash rates affect the ability to win bitcoin?
Is it possible to be solving codes and never actually be rewarded with a bitcoin?
Why just mine bitcoin? Is that not a high-risk way of going about your mining? Should you not be focusing on other cryptocurrencies as well to mitigate your exposure?
How costly do you think it would be to transfer a bitcoin-mining-focused person to mining ethereum or a different alt-coin? Would you be able to use the ASIC chips at all, or would you have to buy completely new GPUs [graphics processing units]?
Why can you only mine bitcoin with ASIC?
Could you ever repurpose a bitcoin mining company into a data centre such as Equinix?
What do you think of the movement to proof-of-stake over proof-of-work? Will this become the new norm? I know bitcoin can only be proof-of-work, but would it ever be possible to change that?
How much more expensive do you think OPEX has become for mining, given the current environment?
Many miners took out leveraged loans when the price of bitcoin was elevated to around USD 60,000, and they’re now having to sell their bitcoin holdings to meet the fiat debt obligations. How do you expect that to evolve? Argo Blockchain’s investment agents report that their net-debt-to-equity is around 40%. With a diminished operating cash flow, how will this be covered in bitcoin if the price is suppressed for longer than they anticipated?
How have contracts evolved for miners who don’t own their infrastructure and have to pay a hosting provider such as Marathon Digital?
How do you think the next halving will impact mining profitability?
Can miners hedge or sell forward production using futures markets or something similar?
How many synergies can be experienced through immersion cooling? I’ve seen in both efficiency gains that it improves computing power by 20-30%, as you can’t overclock the miners because they’re cooled in water, and you’re not as worried about the machine overheating. How does that differ when you’re looking to scale that immersion cooling? Can you still stack miners on top of each other?
Do you think miners always gravitate towards the lowest-cost energy and least-regulated areas?
Do you think there’s a future where the price for energy becomes a proxy for the price of bitcoin?
How can miners control and manage energy CAPEX in the current environment? Are they taking out long-term fixed-energy-price contracts using swaps, selling their unused power back to grids or is it investing heavily into more efficient tech?
Where do you see key target regions for miners in the future?
How did bitcoin miners mitigate recent grid shutdowns in Texas?
Could bitcoin miners use lots of nuclear energy in the future?
The next bitcoin halving reduces the proposed reward to miners, making it more competitive to mine that block, which is leading to increased costs. If we’re still experiencing a stagnant declining market then, and the price is still really suppressed, what’s the best approach for miners? Will they be going offline for a period of months?
What’s the incentive to keep mining if it costs more than power? Obviously, the power is costing you to use that mine. Do you think there could be the potential for a scenario where this does play out, mining becomes unprofitable and then people become very desensitised towards bitcoin and fall out of love with it?
How do you think miners can mitigate the inevitable ESG concerns with proof-of-work mining, especially as large networks such as ethereum are moving to proof-of-stake, which comes with 90% fewer emissions?
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