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Peter Thiel backed Bitcoin mining startup Layer1 launch several mining containers in West Texas. Each mining container is reported to have an energy draw of 2.5 MW.
- Layer1 launch several Bitcoin mining containers in West Texas
- The San-Francisco based startup aims to scale its operations to 100 MW over the next few months with ambitions to capture 30% of hash rate by the end of 2021
- Layer1 launched with third party Bitcoin ASIC mining rigs but plans to utilize proprietary mining rigs around mid-2020
Layer1, a San Francisco based Bitcoin mining startup backed by Peter Thiel, has launched their first mining operations. Layer1 has reportedly launched several Bitcoin mining containers, each with an energy draw of roughly 2.5 MW.
BITCOIN MINING BOOM IN TEXAS
Layer1 raised $50 million earlier this year from investors including Peter Thiel, Shasta Ventures, and several other investors. The Bitcoin mining operations launched in West Texas, a region which has been proposed as holding promise to be a future hub for the Bitcoin mining industry.
A laissez-faire energy market combined with developed electricity infrastructure has industry leaders bullish on the prospects of Bitcoin mining in the region. Several other Bitcoin mining firms have launched in the Texas region including Bitmain’s Rockdale facility with a reported capacity of 50 MW.
AMBITIONS TO CAPTURE 30% OF BITCOIN HASH RATE
The Layer1 report indicates that the startup plans to scale up to a capacity of 100 MW over the next few months. The report further details that Layer1 plans to capture 30% of the total Bitcoin hash rate by the end of 2021.
At the time of writing, the Bitcoin network energy draw is estimated to be roughly 9.16 GW based on the Cambridge Bitcoin Electricity Consumption Index calculation. At the current estimates of total Bitcoin network hash rate, over 500,000 Antminer S17+ mining rigs would be required to capture 30% of the hash rate.
However, the requirements will be far higher at the end of 2021. Although each generation of mining rig has improved power efficiency, the entire Bitcoin mining industry has been racing to add hash power resulting in increasingly higher energy draws from the Bitcoin network.
The Bitcoin mining network will consume as much electricity as the market is willing to sell it in return for the total value of the block reward… This means that increasing the efficiency of mining gear has no impact on the total electricity draw of the network.Coinshares May 2019 Report, P.6
The Antminer S19 series is expected to be released over coming months and the first batch of the Whatsminer M30S went on sale yesterday. According to the DJ Miner Telegram group, a reseller of Whatsminer hardware, the first batch sold out within 24 hours.
Layer1 are also planning to design and manufacture proprietary Bitcoin ASIC mining rigs. However, the current operations are kitted with third party Bitcoin ASIC mining rigs with Layer1’s mining rigs not expected until roughly mid-2020 according to CEO Alexander Liegl.