The State of Bitcoin Mining with Amanda Fabiano & Jaime Leverton

 
 

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“It’s really only been this calendar year that all public miners started to hold almost all of their output… miners used to be the source of incremental liquidity of bitcoin into the system, but now that so many miners are holding, it is restricting supply.”
— Jaime Leverton

SHOW DESCRIPTION

Location: New York
Date: Thursday 9th December
Companies: Galaxy Digital; Hut 8 Mining
Role: Head of Mining; CEO

Satoshi’s white paper introduced the principle of bitcoin mining as both an incentive for creating new blocks, as a means to distribute coins into circulation, and as a means of encouraging nodes to remain honest. Mining is, therefore, the bedrock for Bitcoin. Yet, it is poorly understood even by the most experienced Bitcoiners.

The manufacturing of mining hardware is currently dominated by a Chinese duopoly, which in turn depend upon just two Asian semiconductor companies. Whilst the market for mining hardware is more decentralised, a sizable proportion of ownership is in private hands. Thus, it is hard to get reliable data on the size of the market in terms of hashpower, machine units, and mining costs. 

Combined with bitcoins volatility, this significant uncertainty makes the financing of Bitcoin mining a complex market. Added to this are the difficulties caused by trade tariffs on Chinese goods and the current drama of ubiquitous supply chain issues affecting chip supplies and freight logistics. Finally, mining companies are in the firing line over perceived environmental impacts.

Yet, despite all of these headwinds, Bitcoin mining is a thriving business in both the United States and Canada. Investment is at an all-time high, innovation is driving operations to maximise the hash rate, and the wider world is waking up to how it supports the energy grid and rural communities.

In this interview, I talk to Amanda Fabiano, Head of Mining at Galaxy Digital and Jaime Leverton, CEO Hut 8 Mining. We discuss the current ASIC and mining markets, running operations in an uncertain industry during uncertain times, ESG FUD and the future of mining.

TIMESTAMPS

00:03:31: Introductions
00:04:31: The rise and rise of mining
00:06:20: Purchasing ASICs and contracts of sale
00:09:28: ASIC manufacturers
00:11:38: New miners and general market news
00:20:28: Miners going public
00:28:45: Planning strategy for miners
00:31:12: The ESG issue and the Bitcoin Mining Council
00:41:29: Regulation issues
00:43:22: Raising capital
00:45:12: Web 3.0 and the metaverse
00:51:40: The future of mining
00:55:46: Supply chain and logistics problems
00:57:58: Final comments

 

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SHOW NOTES

Connect with Amanda:

Connect with Jaime:

Mentioned in the interview:

Other Relevant WBD Podcasts:

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