Bitcoin (BTC) mining industry is a lucrative and profitable industry that is witnessing a swelling growth in the number of companies entering the field. The U.S still lags behind in the industry as Chinese mining firms and chip makers hold 60% of the global BTC mining business – compared to U.S’s 5% capture of the mining business.
However, one startup –backed by Digital Currency Group (DCG) and raised $50 million USD in a Series A funding at a $200 million USD valuation – is looking to triple U.S market control in BTC mining.
Layer 1 raises $50 million in series A funding
Layer 1 raised $50 million in a series A funding led by DCG and top investors including Peter Thiel, co-founder of PayPal, Shasta Ventures, and other respected crypto investors. The company will set its operations in Texas and use renewable windmill generated electricity to mine Bitcoins. Once the company begins operation in 2020, it is set to become the largest mining firm at scale in the country.
According to the co-founder of Layer 1, Alexander Liegl, the firm is set to rival the domineering Chinese companies in the BTC mining market by minimizing costs of electricity and optimizing efficiency of the mining chips. Alexander said,
“We expect our chips to be competitive for at least eight years now…you want to have your own chips in hand. We also have our own electricity substations: effectively that's as close you can get to own your own power plant.”
A lukewarm situation in Texas
Texas ranks as one of the most crypto mining friendly states in the U.S due to its cheap energy sources. According to the Department of Energy, 15 percent of the total electricity consumed in the state comes from wind with the prices among the lowest across the globe. However, the high temperatures in the region make it almost impossible to effectively run a mine in the state.
Layer 1 is employing a highly technical cooling system on the miners to prevent burning up or malfunction. The development team of company are working on a system that employs a liquid-cooling component to lower the mining system’s temperatures.
All in all, Liegl believes the San Francisco based company will heavily benefit from the cheapest rates of electricity to offset the heat problem. He further spoke to Coindesk on a phone call saying,
“I love the place. It’s so private-market-friendly. Bitcoin mining is pretty compelling to people out there because it’s pretty analogous to how oil and gas works.”