#1299 Fred Thiel | Largest Bitcoin Miner Explains Why Bitcoin Will Explode
Jan 24, 2024
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Fred Thiel, Chairman & CEO of Marathon Digital Holdings, talks about energy harvesting, new bitcoin mining sites, bitcoin halving, hashrate, and outlook for 2024 on The Pomp Podcast.
Energy harvesting utilizes stranded energy sources to make Bitcoin mining more sustainable and cost-effective.
Transaction fees are becoming increasingly important as a revenue source for miners, potentially replacing the block subsidy in the future.
Deep dives
Energy Harvesting and Bitcoin Mining
The podcast episode discusses the concept of energy harvesting and its impact on Bitcoin mining. Fred Teal, the CEO of Marathon Digital Holdings, explains that energy harvesting involves the utilization of stranded energy sources like methane from oil fields, landfills, and agricultural waste to generate electricity for Bitcoin mining. The waste heat produced during the mining process can also be captured and used for various industrial purposes. This approach aims to make Bitcoin mining more sustainable and cost-effective by leveraging renewable energy sources and reducing reliance on traditional power grids.
Transaction Fees Boost Mining Revenue
Another key point highlighted in the podcast is the growing importance of transaction fees as a revenue source for miners. As the block subsidy decreases over time, transaction fees generated from activities like ordinals, inscriptions, and BRC20 tokens play a significant role. Fred Teal explains that there have been instances where transaction fees exceeded the block subsidy, indicating the potential for miners to eventually rely solely on transaction fees as their primary source of income. This shift towards transaction fee dominance in mining revenue is seen as part of Bitcoin's design to incentivize miners and ensure network security.
Impact of Halving and Institutional Investment
The discussion also touches upon the upcoming halving event and its impact on miners' revenue. Fred Teal mentions that while historically, price appreciation has compensated for the reduction in block subsidy, the current presence of Bitcoin ETFs and increased institutional interest in Bitcoin may result in a more steady, less volatile price trajectory. He anticipates that the liquidity in the market will increase, attracting more institutional money to Bitcoin. As a result, the industry is expected to experience greater stability and moderate price swings, making it more appealing to institutional investors.
Focus on Energy Efficiency and Hardware Innovation
The podcast episode highlights the ongoing focus on improving energy efficiency and hardware innovation in the mining industry. Fred Teal emphasizes the development of immersion technology, which allows for higher power density and reliability. He discusses the benefits of dual-phase immersion technology in particular, which captures and utilizes heat generated during mining operations. Additionally, the episode mentions the excitement surrounding advancements in ASIC technology, with the introduction of more energy-efficient and industrial-focused miners. These hardware innovations are seen as crucial for enhancing performance and profitability in Bitcoin mining.
Fred Thiel is the Chairman & CEO of Marathon Digital Holdings (NASDAQ:MARA), a digital asset company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets. In this conversation, we talk about energy harvesting, brand new bitcoin mining sites, bitcoin halving, hashrate, outlook for 2024, and more.
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Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/
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