How The World's Largest Bitcoin Miner Is Solving The World's Energy Problems

Transcripts are autogenerated. May contain typos.

0:00
The simple pitch is: companies are paying to be compliant. You're leaking methane, investing in a flare, and maintaining that flare just to stay compliant. We can approach them and say, "Hey, how about we pay you to be compliant?" That’s extremely powerful. It’s about understanding where energy generation and demand mismatches are, where stranded energy problems exist, and where heat needs arise. Our goal is to solve those problems as partners rather than just as customers.

0:43
Welcome back to the Block F Podcast. We’re here with Adam Swick from Marathon Digital. Adam, you're a fellow Minnesotan, though I'm in New York now. Always a pleasure to talk with someone from Minnesota! You’re the Chief Growth Officer at Marathon Digital. For those unfamiliar with Marathon, can you give us a quick overview of what the company does? After that, we’ll dig into your background.

1:15
Adam: Of course! Proudly, I’ve survived two Minnesota winters so far and am looking forward to my third. Marathon Digital Holdings is the largest publicly traded Bitcoin miner, measured by nearly every metric, like exahash—we're approaching 30. We also have more than 17,000 Bitcoin on our balance sheet. Marathon began as a Bitcoin miner, operating large, multi-hundred-megawatt sites in the U.S., including Texas, North Dakota, and Ohio. We’ve expanded globally, working on joint ventures with sovereign wealth funds in the UAE and Paraguay. And we’re evolving from being just a Bitcoin miner to a data center company that helps solve energy problems worldwide.

2:20
We took a deep look at our strengths and realized that we’re really good at things other industries aren’t as familiar with. So, we’re expanding on that by focusing on utility-scale mining, decentralized energy harvesting (using flare gas, landfill gas, or the heat from our miners), and developing technology solutions, like two-phase immersion cooling, that other data centers can also benefit from. I joined Marathon a little over two and a half years ago. Back then, the company had just nine people. Now we’re over 100, fully remote, and owning many of our mining sites across Texas and Nebraska. Every day, we’re focused on solving energy problems and ensuring that the Bitcoin blockchain remains secure.

3:30
Host: You’ve had an interesting career path! I was checking out your LinkedIn, and you started in consulting at BCG, right? But you transitioned into the crypto space pretty early on, working at Kraken and Marathon. Could you tell us how you personally got into Bitcoin? What’s your Bitcoin origin story?

3:56
Adam: My Bitcoin origin story is a funny one! It was 2013, and a close friend was deciding between a few job offers. One of those offers was from a company called Coinbase. In order to serve as a sounding board for him, I had to figure out what Coinbase was and what they did. That’s what first led me down the rabbit hole of Bitcoin. My friend didn’t end up joining Coinbase, though. Instead, he became a pastry chef in London!

5:01
From there, my interest in Bitcoin continued to grow. In 2013, when Bitcoin first crossed $1,000, it started getting a lot of media attention, which prompted banks to ask, “What is this?” Consulting firms like BCG were called in to explain Bitcoin, and I found myself on the phone with a bank, explaining the ins and outs of cryptocurrency.

6:00
After a stint in venture capital, I came back to the space and realized crypto was my passion. At Marathon, I started as the VP of Strategy, which, at the time, meant I did everything that everyone else didn’t want to do. But that allowed me to gain a deep understanding of various aspects of the company, from finance to operations to legal. Fast forward a few years, and now I’m the Chief Growth Officer.

7:20
Host: That’s an incredible journey! What was it like when you first joined Marathon, especially during a time when Bitcoin was booming?

7:40
Adam: It was wild. I joined Marathon when the company had only nine people, but it was already an $8 billion publicly traded company! It felt like we had one foot in cryptocurrency and one foot in Wall Street. At the same time, we were managing these huge data centers, working with electricity markets, and navigating the complexities of running a public company. Every day was a learning experience.

9:00
Initially, Marathon had an asset-light model. We worked with hosting partners, which allowed us to grow very fast by spending every dollar on miners rather than infrastructure. But as the company evolved, we started buying and owning our own sites.

10:25
Host: Can you tell us a bit more about how Marathon Digital came to be? What's the story behind its founding?

10:43
Adam: Marathon has a fascinating history. It’s been a publicly traded company for a while now, but it didn’t start as a Bitcoin miner. Initially, Marathon was a traditional mining company, digging in the ground for rare earth metals. After that, it shifted to real estate investments, then pivoted again to become a “patent troll” of sorts, holding patents related to voice interactions with mobile devices—basically, think Siri.

12:05
When Merrick Okamoto came in as the new CEO, he saw the potential in Bitcoin. He recapitalized the company and started investing in Bitcoin miners. At the time, even ordering a few thousand miners seemed like a huge deal. Now, looking back, those numbers seem small compared to the scale we’re operating at today. Our first mining facility was in Canada, and the initial deployment wasn’t without its hiccups. I remember hearing a story about how they installed all the machines and, when they turned everything on, the fans created so much vacuum pressure that it ripped the paint off the walls. The team had to quickly turn everything off and clean the machines before starting again. Now, fast forward to today, and we have around 250,000 miners installed around the world.

14:00
Host: That’s an amazing journey! It’s fascinating to hear about how things have evolved from those early days. You mentioned earlier that Marathon is increasingly focused on solving energy problems. Can you talk about how the Bitcoin ETF and halving have impacted the industry, and what it means for your business?

Adam: Sure! Starting with the ETF, it's been great news for us. We have a lot of Bitcoin on our balance sheet, so we’re very sensitive to the price of Bitcoin. As a publicly traded company, ETFs are naturally a big deal. The introduction of Bitcoin ETFs has increased institutional interest, and the narrative is slowly shifting. It used to be considered too risky for institutions to hold Bitcoin, but now it’s becoming too risky not to hold Bitcoin. That change is happening fast.

When it comes to the halving, it's always a known event that we plan for. The Bitcoin rewards from mining have halved, which means miners are now receiving 450 Bitcoin a day, compared to 900 Bitcoin before. For us, it’s about balancing growth and maintaining efficiency. We’ve focused on deploying the most efficient machines, securing reliable partnerships, and keeping our costs as low as possible.

17:08
Host: That’s a great approach. Do you think we’ll see smaller or less efficient miners start to drop out of the market after the halving?

Adam: Definitely. There are a lot of inefficient machines still running, and the halving is a big test for those operations. If you’ve got high electricity costs and inefficient machines, the math just doesn’t add up. We’re already seeing some miners unplugging their operations, but on the flip side, some are also reinvesting in more efficient technology to stay competitive.

18:42
Host: Let’s shift gears a bit. You mentioned earlier that Marathon has expanded internationally. How are you approaching global expansion, and what are the biggest challenges?

Adam: Great question. We’ve expanded into international markets like the UAE and Paraguay. In Abu Dhabi, we’re partnering with the sovereign wealth fund to balance their energy grid. It’s a win-win because we use their surplus electricity when demand is low, and we shut off our miners when demand is high. It’s a symbiotic relationship, and we’re bringing that approach to other markets as well.

We also look for areas with stranded energy—places where electricity is generated but not efficiently used, like flared natural gas from oil fields. We can go to those sites and use that energy to mine Bitcoin, which not only reduces waste but also creates a revenue stream for the energy producers. We’ve had great success with this model.

22:25
Host: That’s fascinating. Another question we got from the audience was about competition. What sets Marathon apart from other Bitcoin miners like Riot or Core Scientific?

Adam: I’d say it comes down to three things: technology, partnerships, and operational excellence. On the technology side, we’ve invested heavily in proprietary software, firmware, and cooling technologies. For example, our immersion cooling technology allows us to run our machines more efficiently and extend their lifespan.

Partnerships are another key differentiator. Our ability to partner with governments, energy producers, and other stakeholders has opened doors for us that others haven’t been able to access. Lastly, we’ve built a reputation for operational excellence, learning from the best practices in the industry and applying them at our own sites.

25:30
Host: That makes a lot of sense. I wanted to go back to energy for a moment. How do you see the future of Bitcoin mining and energy evolving over the next 10 or 20 years?

Adam: I think the future of Bitcoin mining is going to be increasingly tied to the energy sector. I can see a world where every energy producer—whether it’s nuclear, solar, or wind—has a digital asset data center on site. These centers would act as a flexible load, taking excess energy when the grid doesn’t need it, storing it in batteries, or using it for Bitcoin mining. It’s about optimizing where each electron goes, whether it’s to the grid, a battery, or a Bitcoin miner.

30:00
Host: That’s an interesting vision for the future. I imagine that kind of setup would help smooth out some of the volatility in the energy market too.

Adam: Exactly. And it’s not just theoretical; we’re already seeing it happen in places like Texas and Abu Dhabi. It’s just a matter of scaling that model and making it more efficient.

33:18
Host: Speaking of efficiency, can you tell us a bit more about the cooling technology you mentioned earlier? I’ve heard about liquid cooling, but I don’t think most people understand how it works.

Adam: Sure! So, traditional Bitcoin miners are air-cooled, which is fine, but it’s not the most efficient way to manage heat. What we’ve developed is two-phase immersion cooling, which is much more efficient. In simple terms, we immerse the mining machines in a dielectric fluid, which doesn’t conduct electricity but absorbs heat. The fluid boils, and the vapor rises to a condenser where it cools back down to a liquid. This process cools the machines more effectively and allows us to run them at higher speeds without overheating.

37:40
Host: That sounds like cutting-edge stuff! I imagine that also extends the lifespan of the machines?

Adam: Exactly. With traditional air cooling, machines are exposed to dust and other contaminants, which can cause them to break down faster. With immersion cooling, the machines are in a sealed environment, so they last longer, perform better, and require less maintenance.

40:00
Host: That’s fascinating. We’re getting close to the end here, but I wanted to ask one last question. With all the focus on energy efficiency, have you ever considered owning your own power generation assets, like solar farms?

Adam: It’s something we’re always evaluating. We’ve partnered with wind farms and other renewable energy sources in the past, and we’ve considered solar as well. But for now, it makes more sense for us to partner with energy producers rather than owning the assets ourselves. In the future, though, that might change. There’s definitely a case to be made for miners owning their own energy generation assets, especially as energy storage technology improves.

44:00
Host: It seems like the industry is constantly evolving. Adam, thank you so much for joining us today and sharing your insights. It’s been a really fascinating conversation.

Adam: Thanks for having me! It’s been a pleasure, and I’m always happy to talk about Marathon and the future of Bitcoin mining. If anyone wants to learn more, they can visit our website at marathon.com or follow us on Twitter at @MarathonDH.

Host: Thanks again, Adam, and we’ll catch up with you soon!

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