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At the Futurist conference Blockchain, Ramak J. Sedigh, CEO of Plutoun Mining, discussed the intersection of solar energy and bitcoin mining.
Cryptocurrency extraction has become tougher over the years, with the amount of electricity needed for mining up and the costs of miners rising in tandem.
According to BTC.com, the current bitcoin hash rate is 72.92 EH / s, which is a quintillion hash per second. Since mid-July, the degree of difficulty associated with mining has increased by more than 10 percent.
The hash rate is used to measure the performance of a bitcoin miner. In essence, the faster the bitcoin miner solves the bitcoin code, the higher its output and the faster the bitcoins are created; The hash rate measures the speed of this output. Miners require both electricity and powerful mining equipment to function.
To counter the problem of high prices, companies like HIVE Blockchain (TSXV: HIVE) have been looking for very cold regions, such as Sweden and Iceland, which have low electricity costs.
Other companies have taken a different approach. Hut 8 Mining (TSXV: HUT), for example, has operations in Alberta, where natural gas and wind energy are more abundant.
Plouton Mining is going in an other direction. The bitcoin mining company operates in the Mojave Desert, which has some of the highest temperatures in North America. There, the company is building the largest solar-powered bitcoin mining operation in the world, with substantially zero energy costs.
The Investing News Network (INN) spoke with Ramak J. Sedigh, CEO of Plouton Mining, about the Blockchain futurist conference in Toronto on the project. The conversation focused on improving operational efficiency in the mining sector and on the shortage of long-term mining contracts.
The interview was edited for clarity and brevity. Read on to find out what Sedigh had to say.
INN: Plouton Mining announced that it is building the largest solar-powered bitcoin mining operation on August 9th. Can you tell us more about this project?
RS: There are 50 acres in the western Mojave. It's about four hours west of the Mojave desert. We get 92 percent in sunlight, so it's very good.
We have about a dozen non-productive calendar days, so it's ideal. Average temperatures are 72 degrees, perfect for an extraction operation. We plan to use renewable solar energy.
The land has a capacity of 45 megawatts upwards and for the current phase we are considering 10 to 13 megawatts. There are 50 acres and we plan to use it at peak times – which is the fundamental long-term use of electricity – and we get it for free. It's a front-load cost, but later the panels have a 20-year warranty.
So our daytime solar use and the electricity produced are free. Then at night … it costs $ 5 per watt for storage and production. From solar, we use excess capacity from the network.
INN: It's really exciting. How does solar energy improve operational efficiency?
RS: This is a long-term planning. I'm not so sure about efficiency, but it gives us control, which means we don't depend on the local service company to change their mind and come back and give us any kind of price increase. Because at the end of the day, the service company will have to face an existential decision to make.
Or spend more money – billions of dollars – to increase capacity during peak hours or to cancel the contract with miners who use so much capacity. So far they have decided to cancel the contracts.
So in this respect, it gives us control. In my opinion, if someone wants to do a long-term project, he must control his own destiny. This is what we try to do.
INN: Can you tell me more about the current mining market?
RS: The mining market is obviously hot again now, where the price action is pretty good. The hash rate, the network, the degree of difficulty is going up. It's almost doubled, I think. But the price of bitcoin has tripled. So it's always that game.
In the long run we will only do bitcoin base mining. This is the only network we can trust, on which we can invest in the long term, for the next 20 years because they will not change their structure.
INN: How will electricity prices change in the future?
RS: Will continue to rise. We met a couple of investors from some mining company producers. I and my co-founder met them in Taipei. They were looking for a place for some infrastructure for 40,000 miners and wanted a long-term contract – over five years. So they are looking at our project as an alternative.
I made a bet with them that the next time I see them, they wouldn't be able to find it (long term contract), because they can't. There is no one who can give you a long term price contract because prices will go up at some point.
Public service companies have a productive capacity that goes hand in hand with the increase in the population of that community. If you remove that capacity from their hands and the population grows, they must return to the service commission to get more money to build capacity. And this never happens. Money, billions of dollars, is always growing. They always go to a sort of vote for bonds. They won't do it, so they cancel the contract.
And later we met the investors who were actually in Los Angeles. So no one will sign – no matter how big a contract is. They will not sign a long-term electricity guarantee price for their hosting service for more than one, maybe two years. This is about the limit. And this is essentially the problem in the industry. We don't think long enough. We are still in the process of "What will happen from two to five years?" What about the next 20 years?
INN: Right. That's a good point. What are some of the challenges you encountered with the Plouton solar extraction project?
RS: Envion, GigaWatt, all those who have posed the greatest challenge when you tell people mining and solar, they write it, they laugh at it like, "No, really?" And once they start asking questions, they ask and they understand it. We are producing electricity through solar for our use. We are not selling on the grill again. It's about control and it's about the long term.
And our project, we are not making an initial offer of coins. We are selling international shares. So the people who buy it are not just getting the power of the hash, but are actually buying up land, infrastructure, a solar farm. This is extremely important for people and the biggest challenge is to get people to look at the project under the microscope and through their doubtful lenses. Let them ask the questions.
INN: What do you think of the future of cryptocurrency?
RS: I saw firsthand how the Internet changed our lives. I remember at the beginning of the years & # 39; 90, and I was already late to the game, when I entered a URL and an e-mail address on my business card. I saw and I have a good understanding of the concept of distributed ledger and implementation there. I think it's more for the younger audience to realize these projects that they look at. It will change the way we live at least 1,000 times more than the entire Internet.
Think about your life today. He thinks he has no Internet, he thinks he doesn't have Google (NASDAQ: GOOG); think you don't have a phone and see how your life has changed. And it is essentially what cryptocurrency and distributed ledger will do. Imagine the vote, the ownership, the registration of the car and the document of identity. It is the monitoring of food production from the farm to the supermarket.
It is as if this system were designed for those. This is essentially what the distributed ledger was designed for. Look at real life experiences and build something that will meet these requirements in the long term.
INN: Right. And what are some of the ways you think adoption could be achieved?
RS: I hope, for example, in the mining aspect that we are able to show people: "Hey, c & # 39; is an easy way to extract". For example, why not a hospital for children in a remote and poor city, where they do not have access to much, but have internet. And if they could install solar panels and imagine being, let's say … Iran, Africa, there are so many remote areas in the world that need them. So they can actually use it to extract, to generate money for the project.
Imagine if we could help build a similar structure on a much smaller scale in those remote areas to help a clinic that caters to children. And if you could do it?
And that's what we essentially have to do. This is how we must help. I hope people do things that help the greater good of the communities in which they find themselves.
Don't forget to follow us @INN_Technology for real-time news updates!
With the files of Georgia Williams.
Securities disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.
Editorial disclosure: the investment network does not guarantee the accuracy or completeness of the information reported in the interviews conducted. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their due diligence.
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