2022 has been “the perfect storm” for Bitcoin (BTC) miners, according to Jaime Leverton, CEO of Hut8 Mining – one of the biggest crypto miners and digital asset experts in the space.
Leverton spoke to Cointelegraph Senior Reporter Gareth Jenkinson in an interview with the World Economic Forum in Davos, Switzerland. Topics discussed were the 2022 bear market, Web3 diversification, and most importantly Bitcoin’s growing positive impact on the environment and the economy in general. Leverton shared that 2022 has been an eventful year for the Miners:
“Obviously Bitcoin prices have gone down, the global hash rate continues to hit all-time highs, and then an energy crisis is added to the mix. So it’s definitely been a tough time within the industry. mining in particular.
Bitcoin hash rate, the ease with which miners can find a new block on the Bitcoin time chain and receive the block reward, has increased in recent months. This is despite Bitcoin’s price below $20,000. The profitability of mining plunged as the difficulty of hashing increased. Accordingly, there were several bitcoin and crypto victims of minors throughout 2022.
Leverton explained that a diversified strategy coupled with a successful mergers and acquisitions plan helped avoid insolvency risks for Hut 8.
The group recently launched a “bitcoin repair and mining facility for customers in Canada and Northern Europe.” Meanwhile, a merger led to the purchase of “five enterprise-grade data centers and associated businesses”. Leverton pointed out that the move attempts to fill a gap in the market for digital infrastructure providers in the web3 space:
“They tend to be very dependent on traditional Web2 hyperscalers when trying to build these decentralized platforms. And obviously when you’re building a decentralized network, you don’t want to do it in a centralized infrastructure.”
Web3, once a buzzword in the crypto space, has since become a hot trend for 2023, attracting 10+ digit investments from Hong Kong to Abu Dhabi. Hut 8’s entry into Web3 may lead more Bitcoin-only businesses to consider opportunities in the Web3 space.
The interview ended with an astute discussion about Bitcoin mining and its role in protecting the environment. Leverton is a founding member of the bitcoin mining advice, a group committed to dispelling misinformation surrounding Bitcoin mining and seeking to “address some of the misinformation that has been circulating around Bitcoin’s energy consumption, energy sources.”
Leverton explained that Bitcoin’s transparency might actually be its Achilles heel:
“Part of the challenge we have is that Bitcoin’s energy consumption is so transparent – unlike every other industry in the world, where their energy consumption is opaque. When it comes to Bitcoin mining , you can see the energy produced because, essentially, bitcoin is digitized”
By contrast, it’s a Sisyphean task to quantify the entire power output of traditional banking or finance, though that hasn’t stopped some bitcoin advocates from trying. In a recent interview with Cointelegraphcryptographer Michel Khazzaka estimated that Bitcoin uses at least 56x less energy than the bank.
Leverton explained that there could be a disconnect between Bitcoin mining and its positive impact on the environment and economy. “It starts with education,” she explained. Canadian-born Leverton gave an example of how bitcoin mining is creating jobs, boosting the economy and even providing tax receipts in a small town in Alberta:
“We are their biggest energy user, their biggest taxpayer and a key supplier of technology, labor and in some cases also want to discuss a joint reduction with the City of Medicine Hat.
Additionally, Bitcoin mining can help stabilize networks. Texas recently tinkered the idea of using software to further balance electricity supply and demand on its grid using Bitcoin miners. Similar to Texas, Canada also experiences extreme temperatures. Wild variations require expert network balancing.
Leverton explained how bitcoin mining can support the network in Medicine Hat, another example of bitcoin mining’s role in supporting environmental efficiency:
“And regardless of the increment, we can remove all 67 megawatts and power the grid if it’s during a snowstorm. Regardless of the type of peak activity, we can turn off and power the full amount or as little as half a megawatt. »
Above all, educational conversations and campaigns among policy makers could be facilitated given that Bitcoin miners are now the biggest taxpayers in the region where Hut 8 operates.