Bitcoin Is REVOLUTIONIZING Energy Consumption Worldwide
In this episode of The Bitcoin Layer, Nik Bhatia interviews Fred Thiel, Chairman and CEO of Marathon Digital Holdings. They discuss Marathon's recent deal with the Kenyan government to utilize the country's abundant geothermal, hydro, and solar energy resources for Bitcoin mining. This agreement is a win-win, benefiting both Marathon and Kenya by monetizing excess energy and balancing the grid. They highlight Kenya's familiarity with digital currencies like M-Pesa and the potential benefits of integrating Bitcoin to reduce commerce costs and friction. The conversation also explores the synergies between AI compute and Bitcoin mining for efficient energy use and the future prospects of decentralized energy generation and its impact on the power grid.
Transcripts are autogenerated. May contain typos.
welcome back to the Bitcoin layer I'm Nick baa today we welcome back Fred teal he is the chairman and CEO of marathon digital Holdings we're extremely excited to talk to Fred about marathon's recent deal with the government of [Music] Kenya Fred welcome back to the show thanks great to be here okay Fred I want to start with this deal with Kenya you guys entered a win-win so please describe to us why it is a win for marathon and why it is a win for the people of Kenya sure so um Kenya is a country that is very rich in natural
resources uh they have a lot of geothermal energy they have a lot of hydro energy and they have a lot of solar energy and the challenge is like in many parts of the world there's not enough transmission to get all that energy to where population centers are um and some of that energy is overlapping just like in Texas where you have a lot of renewable energy that is intermittent uh becomes very hard to balance the grid and Kenya has a similar challenge in the fact that when the solar energy is running the hydro energy
becomes excess and so this is a wasted asset and countries are now beginning to look at energy electricity essentially as an asset that should be monetized and very similar to what we did in UAE and what we do in Texas and other places uh we are working with the Kenyan government to evaluate all of their energy assets for electrical generation and seeing which ones could be used for digital asset compute like Bitcoin mining and which ones would be better suited for things maybe like Ai and so the agreement with the Kenyon government
essentially allows us to form a committee together with uh top ministers in uh of the government um they'll essentially uh show us the assets that they have provide us data on how much generation there is how much consumption there is and together we will figure out a short list of projects that where we will go in and mine Bitcoin for example and where they can offer that energy to third parties when we did the signing in Washington a few weeks back uh Microsoft and Google were there as well signing uh
a DLT the g42 which is a uh essentially a venture investor from the UAE regarding developing AI assets so we're focused on developing the Bitcoin mining assets um there for digital compute and uh Microsoft and Google are focused on you know AI data center development at the end of the day the benefit to the people of Kenya is we generating revenues from an otherwise underutilized asset which is stranded energy essentially um and that's a very good thing for the Kenyan people Kenya has a an interesting history when it comes to
digital assets because of uh this thing called Mesa uh a lot of people aren't familiar with it but uh PESA is uh in the Kenyan dialects means money basically um and back in 2007 uh people discovered in Kenya that you could trade mobile um essentially mobile telephone points back and forth and so they used this as a type of synthetic money and so people could buy and sell goats the farmers could trade using these Mesa points and it has become so popular that there are over 10 million people in Kenya who use this
today as their F primary form of Commerce and it's used in over 14 countries in Africa today and so it's a country that's very familiar with digital currencies and so Bitcoin is something that's very much of interest for the government and seeing how they can use it as a way to reduce cost and friction in Commerce in the country in addition to you know what we're doing on parides it's it's very exciting opportunity and you know this is really a perfect way for companies like Marathon to engage with governments to
help them maximize the opportunity they have for their energy Assets in UAE it's very similar in the Gulf region you have these big temperature changes over the course of the year and so you have to provide for lots of power generation in the summer and in the winter you only need maybe a quarter of that energy and so you have this underutilized asset and so what we're doing in UAE is effectively consuming excess energy uh such that the government can generate revenue from the power that we consume and it allows them to do a number of
things relative to uh better optimize not just their power grid and balance the grid but also lower the effective economic load on the government to provide energy at low cost to the popular the Bitcoin layer is sponsored by river river is a Bitcoin only exchange if you guys are looking for a place to get allocated go check them out today at river.
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com TBL that's why it's a a win-win is we have the government able to generate Revenue that would otherwise be untapped and so that's the concept of converting stranded energy into money some of that energy is utilized by you the Bitcoin minor and thus you're able to generate additional profits as as long as your return outweighs the cost of capital of that investment so you you mentioned Fred a couple things here one is the grid optimization itself the other is the stranded energy and not just the Bitcoin mining industry
having interest but also the AI compute side of things let's start there AI is the hot topic of the day and probably will be for years to come now what is the relationship now that you are finding with the AI compute industry I know that at least one of your competitors is involved in Bitcoin mining and AI compute at the same time and really indifferent in terms of which machine to turn on as long as the profitability is there so I'm curious your thoughts on interacting with the AI compute World sure so um we believe
there are huge uh synergies between AI compute and um Bitcoin mining or what we're now more calling more commonly calling digital asset compute um the convergence of energy and compute is a huge topic Scott Galloway you know Professor G has talked about this a lot um and what we're seeing is if you take a site let's just say with 200 megawatts uh you can do a mix of AI and Bitcoin mining AI from an infrastructure perspective is 10 to 12 times more expensive to build uh plus you have the cost of the equipment uh the compute
that's much more expensive compared to Bitcoin mining but they have a commonality and that they both need to use power but what's interesting is um when you are looking at inference which is different than training llms training a large language model um uses a consistent load of energy because you're essentially taking a big pile of data and then you're applying compute to that inference on the other hand is more akin to search and search if you were to look at Google statistics and you could see that you
know there isn't a constant number of queries every hour all day long it varies depending on the day something that looks very much like the demand on the electrical grid it varies during the day and so if uh an AI data center that's doing inference is married with a Bitcoin miner and the Bitcoin miner has intelligent systems that allow them to overclock and underclock their uh compute then as the es and flows of the power demand of the AI data center move the Bitcoin mining power consumption can move uh in perfect um uh uh
synchronization with it such that if the AI all of a sudden you know we're only using two-thirds of the amount of power that we have allocated to AI at this data center then the Bitcoin mining can overclock enough so that it's now consuming that energy so you're not wasting a single electron that has been contracted under a PPA more importantly to be able to do that you don't want to have you know Bitcoin miners sitting there idle just waiting for power to be available and so part of uh the technology we've developed is this
two-phase immersion technology that lets us essentially run uh Bitcoin miners at 60 70% um higher production rates than what they typically would be done um with stock firmware so we have custom firmware we have this two-phase immersion tank which keeps them cooled liquid cooling essentially for the Bitcoin Miners and you can put in place um and buy Bitcoin miners for let's say 50 megawatts of power uh and if you need to run 75 instead of having to go turn on a bunch of new machines you can just overclock those miners by 50% and then
uh consume the power M Bitcoin and then when the AI load goes up again you just dial back the power on the Bitcoin miners so it's a great way to optimize your capex because you're not having to buy too many miners but at the same time you can monetize every electron that you're getting and so this is where we believe our Tech stack starts playing a huge role which is being able to build a data center where you can have this balancing effect and Synergy more importantly the two-phase immersion tanks actually can have either either
mining rigs in them or AI so now your infrastructure cost starts coming down dramatically because we're able to liquid cool AI systems very efficiently in our two-phase immersion uh which allows you to use some of the most advanced AI uh chips that are coming down the pike in two to three years that are much too power dense to use Liquid on chip cooling or air Cooling and uh you know two-phase immersion has this really cool feature in that um let me first maybe explain if you think about how the body cools itself you sweat and
then the sweat evaporates that is two-phase cooling you're secreting a liquid that when it evaporates it sucks all the heat away from your body so um if you have liquid liquid hits a maximum boiling point at which point the temperature of the liquid will not increase and instead it converts the liquid molecules it breaks them apart and it becomes vapor that releases six times as much energy as the water would have and if you have traditional singlephase cooling or cooling that works kind of like an automobile radiator Works um you know
the temperature goes up based on the heat of the equipment in it and then you need to bring the temperature back down all the way uh to cool things with two-phase immersion you just need a two degree change in temperature to convert Vapor back into liquid and so you don't need to expend energy to cool it as much so the technology is really quite amazing in what it allows you to do and we're seeing a large amount of interest um from data center operators who want to have this flexibility if I want to do
AI I also want to do Bitcoin mining sometimes to balance the power um but I don't want to have to build different infrastructure for it well here you go you can build the same infrastructure for both the only difference is for the AI rigs you need specialized networking equipment and things like that um but it's a really exci time I think and it's going to be a time where Bitcoin miners will be able to kind of um diversify their revenue streams which you know many Bitcoin miners have to do because
of the impact of the where it's more in the day and less at night and so we have this energy left over at night or excess energy capacity and you guys are engaged in that type of activity all around the world includ including we've heard lots of stories from OT over the years in Texas on how Bitcoin is helping to balance the grid but something as simple as people now charging their electric cars at night when they previously didn't have have that sort of dynamic now we have Bitcoin miners running at
night what is the strain on the current technology of electricity grids and the uh halflife of some of the equipment is it accelerated with all this additional strain and how are you guys as a Bitcoin miner thinking about the more the Bro the broader electricity grid of which you're only a small part of the game yeah great question um and uh it's almost perfect for a university lecture but um so think of it this way there is something called the duck curve which is the traditional demand curve for electricity during the day starts in
the morning there's a small Peak at 9:00 a.m. and then it drops down again by noon and it's kind of low and then at 3 P.M it starts moving back up again towards 900 PM when it Peaks again and that has to do with people's Lifestyles and what they do um the interesting thing with the grid is especially Texas when you add solar energy it doesn't shine at night it shines during the day and so in historically in the duck curve the lowest point of energy consumption during the day is the middle of the day
when all the sun is shining and generating solar energy and so there are times of the day in Texas for example where you get paid as a Bitcoin miner to use energy because there's so much excess and they want to get rid of the energy um and so as you add EVs and charge at night you're actually not impacting that kind of pricing Dynamic that um affects Bitcoin miners the bigger issue though is not EVs and electrification of cooking uh surface tops and heating it's AI because if you look at the load AI puts on especially
llms AI load is continuous it's base load where Bitcoin mining is an interruptable dispatchable load as it's called you know the aod can call one of our sites and say I need you to shut down for two hours and you have a day ahead signals and all these things um with AI especially if you're running llms you can't do that and even with with inference you really can't do that because you know imagine that you go to Google to do a search query you go to chat GPT to do a query and it says sorry
we're offline because in a crment period right now the customer experience is not going to be very good and so AI has a very different Dynamic about how it needs power than Bitcoin miners do uh and Bitcoin miners are actually viewed as a positive on grid because we act as a balancing capacitor right we can shut off whenever the grid needs the energy AI doesn't have that benefit and that's one of the reasons why AI has to pay higher tariffs for energy but if you look at States like Georgia and and this
is a perfect example um a year ago Georgia said they had enough power uh generation to meet the current needs of of their demand and um a few months ago they updated their projections and said they have a 40% deficit meaning they have demand potentially for 40% more power than what they have as they look at projecting over the next few years that means that some people are going to have to go without power or they're going to have to change the type types of uh demand uh customers that they have uh on their
grids uh Texas recently projected a huge increase in the amount of solar and wind that they're going to bring online over the next few years the problem with that is solar only shines during the day and there's not enough battery capacity to store that energy so Texas needs um more uh consumption to be able to consume during the day but at night they have this problem of you have EVS Etc and you don't have sun shining right so the other big challenge is there isn't transmission capacity for all this new
energy generation that's coming online Texas the West part of Texas where most of the solar and wind energy is generated is not where it's cons the energy is needed the energy is needed in the East part of Texas and to build transmission lines it's hundreds and hundreds of billions of dollars that have to be spent actually in the US um I think FK published a data point earlier this year that said it's about a three trillion dollar deficit in utility spending to build transmission capacity in this country so what that means is
you know you can't build solar farms and wind farms out on the edge and then transport that electricity 600 miles to a city somewhere you need to start generating electricity where it needs to be consumed and this is where our energy harvesting business really fits uh perfectly what we essentially do in our energy harvesting business is we look at can we generate energy from something that already exists at a site for example uh landfill methane gas uh or for the case of like methanol or ethanol manufacturing taking this corn waste
product that otherwise the manufacturer has to pay to have carted off and and process we can take that put it in an anerobic digestor generate electricity from it and then generate heat with our mining operation and then that heat can go right back into the manufacturing process for ethanol and methanol what we're doing is we're allowing the uh methanol plant to not need to have to buy electricity off the grid for their manufacturing process uh or as much energy as they would and instead pay us for processing their waste material and
then providing them with heat we generate Bitcoin as an exhaust of that process uh and in an ideal scenario our cost to mind Bitcoin becomes zero so it's much more beneficial to our shareholders uh because we're not paying for electricity we're actually being paid to generate electricity on behalf of this um this you know the methanol producer and so we're very focused on looking at all sorts of ways where we can essentially use energy that somebody else already has paid for and use that to do things like mind Bitcoin so what
we're doing in Finland which we just released today uh with District heating you know we're heating 11,000 homes in a town in Finland um using heat from our data center and instead of them paying for electricity to generate heat they pay us same tariff and you know Bitcoin miners are very efficient to generating heat 95% of the heat the energy that goes into the Bitcoin miner comes out as heat and because we use immersion technology we're able to capture that heat and then pump it around as this superheated water
essentially which goes out to these homes and heats these homes and provides hot water to the homes so we believe as you look at these types of implementations um in lots of places where Bitcoin mining normally wouldn't be done because it just you can't build these Big Data Centers these smaller energy harvesting Solutions really become the future of where Bitcoin mining is going to go because eventually the power grids are going to say you know we need every drop of power uh to go into batteries we need it to go into
EVS we needed to go into AI data centers and other things where people are willing to pay higher prices for it and Bitcoin miners will be priced out of the electrical bread so they're going to have to generate their own electricity and they're going to have to do it with waste products like uh you know methane coming out of flare gas methane coming from landfills biomass things like that and one of the reasons we're very focused on the international markets is there is still tons of underutilized
energy internationally um where in the US you know it's starting to get scarcer because of this whole AI race and so we we believe this transition to energy harvesting is very important we also believe that we're going to start seeing much more energy generation at the edge where you have solar uh on homes California is doing this very well by the way you have solar and batteries together um if you over Dimension the solar a little bit uh and you have extra batteries you could literally as a residential user uh deploy Bitcoin
mining to uh and there are companies doing this by the way um deploying Bitcoin miners uh to consume that excess energy being generated by the home it's zero marginal cost to produce the energy and now you're mining Bitcoin where the energy is being generated out of the edge you're not dependent on transmission capacity so there's no limit there uh and it starts becoming really interesting uh how Bitcoin mining is all going to go very distributed very decentralized uh out on the edge and we believe that longer term Bitcoin mining
will be a core function of any device that generates electricity or stores energy so Battery Systems solar panels things like that um and it will be sporadic it'll be intermittent it'll go on and off depending on certain conditions pricing in the energy markets sun is shining or not things like that so a lot of interest stuff in the future here Fred you say that you find it interesting the way that Bitcoin is going to impact but I know what you really mean is that it you find it revolutionary the way that it is
changing energy I mean and I can hear that in the way that you you're describing it I want to touch on two things really quickly first on on Finland one followup there are you saying that you are actually removing the NE necessity to consume electricity to produce heat electricity or gas in these homes and you and there's a a a a separate heating liquid that's going and and wired through the town can you describe what you mean by that um it it's not quite what you're saying but essentially what happens is in
Scandinavia I'm Swedish and so this is something that's near and dear to my heart um in Scandinavia over in the 1970s you started developing what's called District heating so you had these centralized steam plants generating Steam and then it's pumped around the city um so that you don't have boilers and heaters in the homes or in the apartment buildings um and so essentially what we're doing is we're replacing one of these steam plants and so while it may consume the same amount of energy as it used to
before instead of that energy simply creating Heat it now creates heat and it creates Bitcoin understood great and then in terms of energy harvesting you're talking about this this is goes back to any excess energy which now includes the landfill methane emissions that and then can you describe the anerobic that process that you described in converting this is landfill methane and TBL viewers will know this concept we talked about this we've had you on before talking about immersion cooling we've done an entire episode on
that so talk to us about the scientific process of converting this landfill methane gas into uh Bitcoin sure so uh landfills you know trash essentially when something rocks it generates methane gas and landfills have a mandate that they have to capture that methane and typically they flare it if if they're not flaring it then they have to either pump pipe it into a natural gas pipeline um after some processing of it or they have to they're generating electricity with it um and the problem with landfill methane gas is depending
on the time of day and how the sun is shining and the weather and the temperature the quality of the gas varies so it's it's very difficult to get a consistent amount of energy out of it but there are some technologies that have been developed that um allow you to do it quite effectively uh and for example at the site in Utah where we operate our landfill pilot um you know I uh we have been able to tune the generators if you would for the specific kind of flavors of methane that come out of this landfill and then the generators
generate electricity and we mine Bitcoin with it in the case of anob digestors uh what you're doing is instead of taking landfill methane gas or flare gas from like an oil field or gas lines um what you do is you're taking essentially biomass so um if you think about methanol and ethanol these are corn-based fuels to create the fuel you have to process corn and once that corn has been processed there's a ton of waste product and that's agricultural waste um and if you look at agricultural waste it is a huge producer of methane
on the planet and it has to be processed to get get rid of it you can't just throw it away and so you can put it in what's called an anerobic digestor which is essentially think of it as like a compost system where you have a specialized bacteria that you have you tune the bacteria to the specific type of waste you're having the benefit with like methanol manufacturing is it's a consistently the same biomass that you're getting it's not like on a trash Heap where one day there may be diapers
and one day it may be meat products another day it may be vegetables it it's much easier actually in a methanol plant or an ethanol plant um and you know you stop at a gas station you'll typically see there's ethanol in every sort of gallon of gas so it's a huge industry and so we can take this biomass put it in an Anor robic digestor which is essentially a bacteria filled compost system whose output is methane that we then uh use to generate electricity and then we feed the heat from our miners
back into that process because to create ethanol you have to heat it 50% of the energy used by industry globally is used for heating and of that about 14% is the type of heat that we can generate in our data centers think about the cost savings to Industries if you could take the waste product of that industry turn it back into energy and then that energy back into heat so that the industry doesn't have to pay for the energy in the first place this is a great way to save uh and lower consumption of electricity on
power Goods now I want to ask you really quickly before we move on I know it's not your job to build out the three trillion in transmission uh wires that need to go all around the country and you're just talking about United States that doesn't even come close to including the amount of transmission capacity needed on a global scale is is there any what what would your be your policy recommendation or your first move if you were in charge to get the United States better positioned for future electricity
consumption um so I would do a couple of things one is um I would start evaluating um essentially a land use uh policy whereby it would be much easier for um FK which is essentially the feder uh energy commission uh to uh work with utilities such that they would be able to get land such that you could put cables uh power cables uh install them either on high tension power cables or or groundbased systems the problem today is a lot of the cost and the time delay is you have to essentially either buy land or get rights of ways it's kind of
like building a railroad or a pipeline it's the same process nobody wants to have high tension power cables running over their house and so people don't want to have these things in their backyards um and there's a bit of there's a lot of nimbyism around this um and I'll give you an example from Sweden for example in the North of Sweden uh which is similar to New York lots of hydro energy it's very cheap 2 cent per kilowatt hour energy but most of the population is the southern end of the
country just like New York it's in the southern end of the state in New York City and so you have transmission that go goes north to south the problem is there's not enough capacity in those transition transmission lines such that um the the uh consumers in the South have to import energy from high cost places externally in Sweden they have to import energy from Germany at 10 cents a kilowatt hour when it costs them two cents in the north of the country because nobody wants to have more high power tension cables running over their
houses and so we need to solve the technology of energy transmission right whether that is done through some form of Wireless means some form of light based laser type technology uh or other um but the fact of the matter is that existing copper cables just we know we reached a point where they're inefficient and yes there are new copper types of there new wire systems that allow you to maybe get double maybe triple the capacity on a line but you still have to run that c you still have to pay you know millions of dollars per
mile to run that cable uh on the existing towers of through the existing system and so this is why it's taking so many years and so much money the the real problem then comes down to who's going to pay for it and so the utilities if they're going to invest in it the consumer has to pay for it right because utilities are you know for-profit businesses and so you and your neighbors don't want to have double or triple the electrical rates it's already expensive enough as it is um to have more transmission capacity
and so the best way to engineer around this is to use first principles and instead of trying to build more transmission capacity find ways to generate energy in your backyard instead of having to import energy from a power plant somewhere 600 miles away or a solar farm 600 miles away right and you know the future especially if you look you'll recently have seen uh all of a sudden there's a lot of activity in the nuclear energy world right the government has now uh relaxed the requirements for what it takes for
companies to develop nuclear technology you have SMR small modular reactors they're 30 megawatt power plants that consists of really a couple of 40 foot containers that use the spent fuel rods from existing nuclear plants so you don't have to import new uranium that's been enriched uh from foreign governments that we don't particularly like to deal with in this country and so you have to start looking at these alternative energy forms you know solar on building solar on you know commercial structures solar on
residential homes Battery Technology to store it and other forms of energy harvesting and I think that's where you'll really break the uh gordian knot that we have around energy transmission um you know great example of this is if you look at China in the uh 80s they had the opportunity to uh you know they needed to build out their telecoms infrastructure and they could do it the way traditional countries have done which is run a bunch of copper cables all over the country and instead they went almost 100%
Wireless and they could do that because they didn't have installed infrastructure I believe in the US and in the developed world we need to really sit down and say we need to focus generating electricity and incentivize people to deploy systems to generate electricity where it's going to be used and you know who the biggest Lobby is that fights this it's the energy you ities because essentially you're telling them we want you to put yourself out of business and so they fight this and so it's you know that's a big
challenge Fred we hope that you continue to brainstorm on energy policy and publicly share your policy recommendations because your points on land use and obviously the challenges there um are independent of the prospects of w Wireless transmission or other transmission of the electricity uh that could really change the way we consume electricity and energy as an entire planet uh Fred the last question I want to ask you is last time you were generous with us and sharing where around the world you guys are really
excited about working so I'll ask you the same question you've mentioned you've mentioned places in Africa the middle east Europe and the United States so far far today where are you guys looking from the marathon perspective for great opportunities in uh excess energy stranded energy methane landfill friendly governments governments that are Forward Thinking governments that are digal digital currency uh open-minded I want I want to hear from you sure um well you know the there's this expression the world is my oyster um
when you look across the spectrum of technologies that we have developed and and we are developing relative to energy use whether it's energy harvesting or whether it's utility scale mining um there are huge opportunities in Latin America there is a ton of stranded energy underutilized hydroelectric energy you know clean energy um there there is a there are great opportunities for uh solar eny energy as well in Latin americaas the high desert of Chile for example is a perfect spot and a lot of these renewable energy projects have
never been able to be funded because it's the inability to get the electricity to a consumer so instead bring the consumer meaning us to the energy um Africa similar thing you have uh lots of excess energy you know Kenya has so much geothermal energy they could power great swaths of Africa if you could develop it and um build power lines um and that's why there's so much interest in building data centers in Kenya Tanzania similarly uh the Gulf region you know uh all around the gulf all these oil producing states they are flaring tons
of methane all that methane could be captured and turned into energy uh you have uh large amounts of agricultural waste in Africa across Asia um you know the Indian subcontinent uh there are very exciting opportunities and there are lots of renewable energy companies that have developed and invested huge amounts of money in uh Asia South Asia Africa and other places where the ability for them to generate more energy uh has very low cost but there's no off-take there's no consumer for it and so we believe that by partnering with
utility companies and I kind of uh laughed the other day when somebody reminded me uh there's a conference called mining disrupt which happens in Miami every year and it happens to be next week here in Miami U I'm in Miami right now um and three years ago I spoke at the conference and said Bitcoin miners are going to have to partner with power utilities because it's going to be a joint venture between them well you know here we are three years later and that's what's going on today uh so all
over the world uh there are some places where for example we don't want to expand um you know places like Canada for example we think the government in Canada is very unfriendly regarding energy policy for data centers and what we're doing um there are certain countries where there's regime risk in Africa there are places in Latin America where there's too much instability um so you know there are definitely places uh in Asia Africa Latin America where uh we don't want to go um in Europe it's interesting they
are very against Bitcoin mining because of its energy use but the minute you engage with European communities and entities and you talk about energy harvesting all of a sudden it's a good thing so you look at this Heating in Finland you know if you can show hey I'm going to remove an energy need over here and I'm going to replace it with an energy need here that's its equal and oh by the way I'm going to do it by heating Electronics is that okay all right now the electronics happen to be mining
Bitcoin is that okay yeah absolutely you're not consuming more energy than we otherwise were and so if you have the technology that lets you do that which we do and you can build it reliably and so it's stable enough uh then you know I'll give you some funny math here to look at the city of New York has 990,000 some OD boilers that are uh operating uh you know burning fuel oil imagine if you replace the with digital asset compute heating devices you would decrease the amount of pollution being made and you would actually improve
people's quality of life and at the same time you would be decentralizing the Bitcoin Network considerably so we really believe that you know this is technology that's going to become very pervasive um it could be as pervasive as Wi-Fi is in homes and things like that you know you don't it's not going to be an a hash in a home it may be a small amount but every little bit of compute um that is securing the Bitcoin blockchain especially in a highly decentralized way like this um goes to strengthening the security of
the Bitcoin blockchain and uh what it also does is it ensures the security budget for the Bitcoin blockchain because as having continue to happen and if transaction fees don't make up for the decrease in Block subsidies uh then these large util ility scale Bitcoin mining sites will not make economic sense no matter how efficient the machines are and you know we've seen machine efficiencies drop by meaning uh they become more efficient to the tune of 50 60 70% over the past three years but you know if energy costs remain at
three cents a kilowatt hour on grid and you have a having every four years in eight years it's not going to be profitable to mine Bitcoin no matter how good your machines are um if you're on grid you have to find some other way to subsidize what you're doing to lower your cost of energy and uh you know in Texas we already have an issue with the fact that there are Rumblings in the states of Texas about taking away these incentives that Bitcoin miners have for selling ancillary Services participating in
these programs and uh while that Lobby is driven by economic interests around peer plants battery plants um and heavy industry um nonetheless it's going to impact the profitability of you know large Bitcoin miners uh people like Riot that generate a lot of revenues based on their energy trading and accary services and so I think you know you're going to see um a real move away from these big Mega you know 500 megawatt sites to a lot of smaller sites um that do things uh using stranded energy that otherwise really
can't be sold and uh they're able to acquire that energy at very low cost and uh you know mine Bitcoin Bitcoin is the world's greatest Arbitrage mechanism it sounds like and that's the way it's heading Fred teal chairman and CEO Marathon digital Holdings thank you so much for joining us once again please tell people where they can learn more about your company you can find us at mar.
com m.com and I'm Fred mar.com or via Twitter FG Tel Fred thank you so much much and we'll catch you guys next time great thank you the Bitcoin layer is proud to be sponsored by river river is a Bitcoin only exchange we think it is the best place for you guys to get allocated if you have made that decision to purchase Bitcoin so go check the mount river.
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