texas was once a promised land for Bitcoin miners,
thanks to the state's stable regulations in seemingly endless supply
of cheap energy, but that may no longer be
the case with the state's grid operator, the Electric
reliability council of texas or ercot as slow new permits
for miners to connect to the grid. This while
Bitcoin prices have slumped over the summer, reducing the
profits that miners take home. And joining me now
is Mike Leavitt, the co founder co chair and
Ceo, of course, Scientific, the biggest publicly
traded Bitcoin mining company in north America. Mike.
So good to have you on the show. I
know saying over these past four months or so,
the numbers of minors applying to plug into the grid
has doubled. There's a lot of demand and about
a quarter of cores activity is in texas. So
has air kat's decision to slow permits impacted you and
your company in any way. First. Uh I
would say that we, we really are, we
respect their decision and and actually applauded. Uh we
think that being patient and being thoughtful about the approach
to permitting for new facilities in texas and on air
cut makes a lot of sense with regard to our
development. Uh we've been working with haircut for an
extended period now uh into a couple of years to
very thoughtfully uh place our facilities in locations. That
makes sense for the texas grid. So as far
as our development has concerned, we continue apace in
texas and look forward to to working with air cut
as we develop out those facilities. So it sounds
like the state is still an attractive mining place for
you. Is that right? Yes, I think
that's right. There is still tremendous power availability,
excess power if you will that that isn't used or
needed most of the time. And texas leads the
nation in terms of its development of renewable energy.
How crucial is stable power supply mike to do what
you do, operating the biggest Bitcoin mining company in
north America, stable and plentiful power is absolutely essential
to operations for Bitcoin mining. That said um we
represent a unique load for the grid. We're able
to down power on a moment's notice and as a
result, what what having Bitcoin mining on the grid
does is it provides really a performance and enhancing capability
. It's a benefit to the grid to have demand
like ours and frankly it's a benefit to consumers because
we're buying energy when in fact it's available in excess
. So walk me through your business model mike obviously
you need power to do what you do is the
biggest Bitcoin mining operation here in north America and then
you're selling those Bitcoins. Is that how it works
? Who are you selling to? What are the
prices that you're demanding for those? Sure. So
in terms of our business model, great question.
We're a data center operator. Like any other data
center operator. We operate servers and we draw our
power from the grid in order to power and operate
those servers in our case we operate Bitcoin producing servers
for our own account which represents a little bit more
than half of our servers. And we also have
a quite extensive co location business. We're operating servers
for uh the account and benefit of our customers,
a classic hosting business. If you're in the data
center business uh in our in our co location business
were paid in us dollars for hosting in our self
mining business, we earn Bitcoin and we do have
a policy where we do sell some of our Bitcoin
at the end of the day. Our liabilities,
our obligations are in us dollars and we want to
make sure that we maintain a strong balance sheet.
We need U. S. Dollars to fund our
growth and we are continuing to grow through these very
distressed or difficult times. So let me, let
me ask you that mike. So how much does
the price for Bitcoin impact your company? What's the
correlation? Well, if we we are absolutely correlated
with the price of Bitcoin um there is no doubt
that all of the mining companies, our um we
like it when the price is higher and we like
it less when the price is is low um on
a sort of variable cost basis, we are still
very profitable uh in Bitcoin mining but that said we
feel a lot better when the price is at 40,000
when it's at 20,000 As the spread between 20 and
40 is all incremental profit to our company. How
have some of the recent extreme weather events in the
texas area? Really throughout the south? Mike impacted
your company as a company that does rely on the
power source down there. Uh, it absolutely has
had an impact. We uh, as a matter
of company policy and frankly being good citizens and good
participants in the grid. Uh, we down power
whenever asked whether it's in texas or other states throughout
the south. You're right, it's been warm this
year. Uh, I live in Austin and I
think we're, we've had something like over 60 100
plus days in Austin this year. It is record
setting heat across the south. And so generally speaking
, we have found in those super hot days that
we'll lose uh 4 to 5 hours of production a
day if you will on those, those sorts of
days, generally you're looking at between one or two
o'clock in the afternoon and six o'clock or so in
, in the early evening. And we down power
to do our part to make sure that the grid
performs well for frankly all of the others in our
regions mike. Let me ask you one last question
here. Um, there have been a lot of
stories about the intense climate impact that Bitcoin mining itself
has that it takes 70,000 times as much power to
do one Bitcoin transaction as it does to transact on
your Amex card for instance in a single transaction,
how is your company trying to reduce the carbon footprint
of Bitcoin mining and transactions? Well, so we
are very aware of of this issue. First of
all we don't produce power. We're a data center
, we draw power from the grid and so the
best thing that we can do is work with the
power generating companies and with the grid operators to help
them develop to enable the the creation of more renewable
energy. We are a wonderful base load for renewable
energy. And so we try to cite our facilities
. We try to work with those power providers to
enable the development of renewable energy resources. And and
so we work very hard at trying to do that
and to work with them. That's first and foremost
the best thing that we can do. But but
again recognize we don't produce power like any data center
. We use power. Yeah, okay. We
got to leave it there. Mike Leavitt co founder
co chair and Ceo of course scientific mike. I
hope you come back. Thank you