Bitcoin mining startup Layer1 Technologies has begun operations at its West Texas facility, with an ambitious roadmap to secure 30% of the hash rate.
Layer1, which raised $50 million in November from Thiel, Shasta Ventures and Digital Currency Group, said it has now brought multiple 2.5-megawatt liquid-cooled mining containers online.
Its short term goal is to scale up to 100 megawatts and 2% of the hash rate over the coming months.
But it’s the long term goal that’s raising eyebrows: the company roadmap lays out a vision of repatriating 30% of the hash rate to the United States by the end of 2021, citing national security considerations. On current figures, that would make Layer1 the largest mining outfit in the world.
More than 60% of Bitcoin mining operations are currently located in China but less than 5% of the hash rate and none of the hardware for Bitcoin mining come from the U.S.
In a statement, Layer1 claimed that bringing almost a third of the hash rate back to America will enable the U.S. “to offset China's dominance in Bitcoin mining and improve the country's national security efforts for an asset class with the potential to be a reserve currency”.
Layer1 is building sustainable Bitcoin mining
Layer1 is designing and producing its entire mining infrastructure, using proprietary ASIC chips and liquid-cooled mining containers that the company claims enables it to “unlock warmer climates” where low-cost, sustainable energy is available. However much of its custom mining equipment won’t be ready until mid-2020 and it is using third-party machines in the interim.
Co-founder and CEO Alexander Liegl said the company was already profitable in the short term and would thrive when others faltered as a result of the Bitcoin block reward halving in May.
"From hardware to energy, we've redesigned Bitcoin mining from first principles to control every profit and cost lever across our technology stack. Far too many mining operations still work from a playbook stuck in 2017; the halving will be a death knell for many of them."