BlocksInform
2022 was "the perfect storm" for bitcoin () miners, according to jaime leverton, CEO of mining hut8, one of the leading crypto miners and experts in digital assets in space.
Leverton sat down with Gareth Jenkinson, senior reporter at Cointelegraph, in an interview at the World Economic Forum in Davos, Switzerland. Topics included the bearish market of 2022, the diversification of the Web3 and, crucially, the growing positive impact of bitcoin on the environment and the economy in general. Leverton shared that 2022 was a turbulent year for miners:
“Obviously depressed Bitcoin prices, global hashrate continues to hit all-time highs and then an energy crisis is thrown in the mix. This is a difficult time for the mining industry especially."
Bitcoin hash rate, the ease at which miners can find a new block on the Bitcoin time chain and receive the block reward, has climbed higher in recent months. That’s despite the Bitcoin price bobbing below $20,000. The profitability of the mines has plummeted as the difficulty of hashing has increased. As a result, there were several Bitcoin and crypto miner casualties throughout 2022.
Leverton explained that a diversified strategy coupled with a successful M&A plan helped stave off insolvency risks for Hut 8, one of the world’s largest publicly traded Bitcoin and crypto mining companies.
The group recently launched a "Bitcoin and Mining Repair Facility for clients all over Canada and Northern Europe." During this time, a merger led to the purchase of "five enterprise quality data centres and the associated company." Leverton noted that this change is attempting to fill a market gap for digital infrastructure providers in Web3:
'They tend to be really reliant on traditional Web Two hyperscalers because they're trying to build these decentralized platforms. And clearly, when you build a decentralized system, you don't want to do it in a centralized infrastructure."
Web3, once a buzzword in the crypto space, has since become a hotly-tipped trend for 2023, attracting 10-figure-plus investments from Hong Kong to Abu Dhabi. Hut 8's entry into Web3 might inaugurate more Bitcoin companies just to consider opportunities in the Web3 space.
The interview ended with a clever discussion about Bitcoin mining and its role in environmental protection. Leverton is a founding member of the Bitcoin Mining Council, a group engaged in dispelling the misinformation surrounding Bitcoin mining and “tackle some of the misinformation that was coming out around Bitcoin's energy use; the sources of energy.”
Leverton explained that Bitcoin’s transparency could in fact be its Achilles heel:
“Part of the challenge we have is Bitcoin's energy use is so transparent. In contrast to all other industries in the world, where their energy use is opaque. As far as Bitcoin extraction is concerned, you can see the energy produced because, basically Bitcoin is digitized"
On the other hand, it is a task of Sisyphea to quantify the whole energy production of the bank or traditional finance, even if it did not prevent some defenders of Bitcoin from trying. In a recent interview with cryptographer Michel Khazzaka, he estimates that Bitcoin uses at least 56 times less energy than banking.
Related: Seven times Bitcoin miners made the world a better place
Leverton explains that there could be a disconnect between Bitcoin mining and its positive impact on both the environment and the economy. "It's about education," she said. A native Canadian, raise your tees up an example of how bitcoin mining creates jobs, stimuls the economy and even provide tax receipts in a small city in alberta province.
“We’re their largest energy customer, their largest taxpayer, and a key provider of tech, labor, and in some cases, we also want to talk about joint curtailment with the city of Medicine Hat.”
Furthermore, Bitcoin mining can help to stabilize grids. Texas recently tinkered with the idea of using software to further balance the supply and demand of electricity to its grid using Bitcoin miners. Like Texas, Canada is also in the midst of extreme temperatures. Wild variations require expert grid equilibration.
Leverton explains how Bitcoin mining can support the grid in Medicine Hat, further example of Bitcoin mining's role in supporting environmental efficiency:
"And on any scale whatsoever.", we can cut all 62 megawatts and power the network in the event of a snowstorm, any type of state-of-the-art business, we can shut off the power and power everything or as little as half a megawatt."
Crucially, conversations and educational efforts between decision makers could be facilitated as bitcoin miners are now the largest taxpayers in the area where Hut 8 operates.
