Boiling the Oceans – What does Bitcoin mining do besides mining?

TABLE OF CONTENTS

Introduction (by Troy Cross)

Our moderator is Kent Halliburton. He is CEO and co-founder of Sazmining, a hosted mining operation in Paraguay and the US. Kent, is a friend and someone I’ve worked with for a long time. 

Bert deGroot, everybody knows Bert. Bert is probably known to many of you as the ‘Tulip guy’, heating greenhouses with ASICS. But he does many things and runs a company (Bitcoin Brabant) that provides a range of services to do with Bitcoin. He is also a great spokesperson featured widely in the media for Bitcoin and its potential. 

There is Willem von Royen, an OG Bitcoiner, Bitcoin miner, engineer, and  ‘right-curve’ guy who founded a company (Flowsolve) that promises to do something you never thought Bitcoin mining could do; prepare to have your mind blown completely. I won’t spoil the surprise. 

Lauri Pispa, entrepreneur, and managing partner at E-Heat, which does District heating with data centers, it’s amazing and completely uncontroversial, or should be!

And finally, Jelmer ten Wolde, CEO of GreenTech, focuses on heat recovery and energy strategies. Jelmer is the kind of ‘Boy Wonder of heat’, self-described. 

This is “what Bitcoin mining does besides mining Bitcoin”

Just a reminder, all the energy that goes into Bitcoin mining machines comes out the other side; energy is conserved it is a basic law of physics. I run into people who think that the energy coming into a miner is split between Bitcoin and heat, but Bitcoin is not a physical thing, it isn’t where the energy goes, and there is no ‘physics’ of Bitcoin itself.  So, all that heat, all that energy has to go somewhere, and for the most part, Bitcoin miners don’t use it [heat energy], however, these folks do.

The problems Bitcoin mining solves

Kent Halliburton

Thank you for that intro, Troy. The first question we were going to ask, Troy answered fairly well which is ‘what Bitcoin mining does besides mine Bitcoin’. So, I think we should jump right into what your projects are. When getting to know everybody here on this stage over the last couple of days it is pretty clear that some unique dynamics in the EU are non-existent in the US and North America. I think it is good to highlight those, so I’d love to start just by asking Jelmer what are some of the unique dynamics that you experience and what problems are you trying to solve with Bitcoin mining.

Sustainable heating

Jelmer ten Wolde

The unique dynamics of the European market are primarily power-related and subsidy-related. So, to understand why we do what we do, you need to understand why it’s relevant. Right now, the European Commission, and the European bodies, are heavily pushing toward a carbon-free world. There are a lot of subsidies in place to go to electrified heating and sustainable heating, and they are putting a lot of weight behind this. 

So, what does that mean? It means that hundreds of millions, up to billions [of Euros] are used to subsidize the installation of e-boilers, heat pumps, and a lot of other assets to provide, in their opinion, sustainable heat. There is just one big problem with this, in my opinion, it is a very ineffective application of financial support. 

At the moment, because we have a company that also sells e-boilers, many of our customers don’t intend to run that e-boiler 100% of the time, they intend to only benefit from negative pricing. So, they only run the e-boiler when there is a negative electricity price so they can produce heat at an economically viable price. In Europe, they are predicting more negative electricity prices over the coming years due to the extensive build-out of renewables, but it still won’t be more than maybe 8 to 10% annually. 

So, that means there’s a very heavy subsidy to run an e-boiler for a very insignificant amount of time (8-10%). If you then look at the power markets, right now we have a very extensive energy crisis in Europe, a lot of industries have been bankrupt. We have been paying €800/megawatt as a base load price for the last two years; it has been crazy! In response, a lot of industry left Europe, which reduced the demand side, but in parallel to that, we’ve been building out more and more renewables, subsidized, causing a much larger curve. This means that prices whenever renewables are active are much lower, often negative, which requires load balancing. 

So, in Europe, we are creating issues for ourselves by heavily subsidizing a lot of power-related things, and there is no answer on the demand side. Well, there is one answer, I think we all agree on this panel: Bitcoin mining!

It is the superior heating form for sustainable solutions because Bitcoin doesn’t need a subsidy; Bitcoin is the subsidy. This is a very powerful thing for a lot of different industrial users, they don’t realize it yet, the ability to produce heat and get money for producing heat is not very well known. On top of that, the ability to balance the grid in the fast-response markets will further reduce your cost of power to zero; to mine for free in Europe is a wonderful thing.

Bitcoin mining for district heating

Lauri Pispa

I have the same problems you mentioned, so kind of hard to add anything. We started as a mining company and now we’re more like a heating company that provides data centers to people in need of service space, mostly Bitcoin mining. Of course, we are competing against other countries like America; the power is much cheaper than in the EU, and we had the energy crisis a year ago, so we’re just trying to get back to normal after that. 

So to start, there is a huge amount of heat produced by Bitcoin mining, and we need to utilize it somehow; it is kind of stupid if it goes to waste. I understand that you cannot use waste heat everywhere in the world, but in Finland, at the moment it is very icy, soggy, and horrible. So, we need a lot of heating, and what better way to produce heat than with Bitcoin mining? 

The efficiency of Bitcoin mining is 98-99%, so we are not wasting any energy that the miners use. In our prep panel, Jelmer perfectly articulated that we create double the energy. So, if you use one kilowatt of power for the servers [bitcoin miner], they use one kilowatt of power, but also it creates one kilowatt of heat. So, we kind of produced two kilowatts of energy, which is incredible. 

The biggest problem in Finland, where I come from, is that Bitcoin is still seen as the energy-wasting industry. So, we just really need to show the politicians and everybody that Bitcoin mining is a good thing. This is the biggest hurdle that we have at the moment.

Boiling the oceans with Bitcoin mining!

Willem von Royen

Flowsolve is here because we use heat as a product. What we are building is a new miner that allows you to apply the zero law of thermodynamics more directly. We’ve been working on this for three years now and our first application is the distillation of water, for example, desalination. 

The application of heat is anywhere you need an endothermic chemical reaction. Bitcoin [mining] makes the process more profitable, so we can boil water for pasteurization, distillation, potassium mining, lithium mining, and all of these things that require heat to separate water from whatever is dissolved in that water. We have been building a Bitcoin miner, a hash board (10cm x 4cm) so small you can add it into any heat application, to heat all the things, and boil all the water.

Bert deGroot

So, Willem will boil the oceans!

Willem von Royen

Literally, boil the ocean, that’s our first application: desalination. We take the waste brine, the very salty brine that you get from reverse osmosis, we boil that and separate that salt. So, instead of pumping it back into the ocean, we boil that water, and we get dry salt and water, pure water.

Bitcoin mining for the home

Bert deGroot

So for me, I started mining at home because I wanted to heat my home, super-small scale. These things are super noisy, so I had to build a box because the wife was not happy [with the noise] and from that point when the electricity prices exploded for my home mining and my heat at home, I had to find a solution and that solution was a greenhouse. I built an aluminum frame around it and put it on Twitter, it had half a million views, so the phone started to ring. 

We implemented a few installations at locations where it made sense to use electricity instead of natural gas for heat. As was mentioned before there are heavy subsidies on electricity generation with renewables, so if you have excess electricity you don’t get paid for delivering it back to the grid. So it is better to mine [bitcoin] and use the heat. 

At first, it was medium, small-scale businesses and then last year we refurbished S9 miners (five-plus year-old machines), we made them silent and we sold a lot of them to people who just wanted to mine at home using an open-source home assistant. So when they have a negative electricity price, they get paid as the miner switches on. They use a thermostat to heat the home to the temperature they want, they have excess electricity anyway so it is very cheap. We sold these machines for €200 each, just to show what the capabilities were. 

Home mining is growing, people want to touch this and see what bitcoin [mining] can do. I hope to see this continue to grow and it makes sense at locations where there is excess electricity in combination with heat demand and where you can replace the natural gas use.

What are the future opportunities for Bitcoin mining?

Kent Halliburton

So, I got to say what you guys are up to is inspiring and I think that there’s some pretty specific dynamics here in the European Union that are making this innovation happen. Most people may not know that energy is much more expensive here in Europe. So to be competitive in the European Union, these guys are forced to innovate but what’s great about this innovation is that it will eventually ripple out to the rest of the Bitcoin miners in the long term. These guys are not only innovating but pioneering for all of us providing mining opportunities elsewhere.

Jelmer, I know you’re excited about subsidies and how they’re helping with the price manipulation, creating more opportunities. You are addressing the problems of today through Bitcoin mining, utilizing heat in various ways, whether that’s heating districts, heating homes, or desalinating water. All these different approaches are innovative today, but what about tomorrow do you see other opportunities that Bitcoin mining has not got to that we can address?

Does Bitcoin consume enough energy?

Jelmer ten Wolde

I think the unaddressed opportunities are still in heating because right now we are not Riot [Blockchain; mining company], we don’t have a one-gigawatt connection, we are modest miners, we are scaling up but we are still not nearly at that volume.  What people tend to forget is that energy is a mix; heat represents 80% of the total energy consumed, whilst electricity is only 20%. If you go to the Jesse Pielke HashrateUp Podcast, he always answers with the question “Does Bitcoin consume enough energy yet?” 

The thing is we couldn’t consume enough electricity yet, even if we wanted to decarbonize all the heat demand through Bitcoin mining. There is currently not enough electricity to do that, we need significantly more if we want to do heating. This example is to clarify that heat will be the opportunity, but of course, there are many more opportunities, one of the the big ones in the Netherlands is load balancing. In the US it’s becoming more of a topic of curtailment, but in the Netherlands, we use something called AFRR (Automatic Frequency Restoration Reserve) markets, which is a balancing market requiring a rapid response that not many assets can participate in, besides batteries and peaker plants, and we don’t have many of them! They often shut down in March because they also produce heat, and in March there is no demand for heat anymore. 

Bitcoin mining and E-boilers can also participate, but E-boilers can only downward balance. So, you have two different load-balancing markets you have upwards and downwards. Downwards balancing is consuming energy when there is an excess, whilst upwards balancing is providing energy back to the grid. The good thing about Bitcoin mining is that it is a base load, so you can remove your load and provide energy back which is qualified as an upwards balancing activity. Right now the grid lacks a significant amount of assets to do this [upwards balancing] so it is paying very handsomely for people to participate in these markets. 

This is the largest subsidy we get on our mining activities because it just brings down our price to a very low-cost, allowing us to make Bitcoin mining one of the most competitive heating sources on the market right now. 

A year and a half year ago, I would not have given the same reasoning, because the energy market was just completely distorted by the energy crisis. Fortunately, it is stabilizing now and so we’re in a very unique, advantageous position; prices are low and demand for balancing is high. It is growing because as we continue to build out more renewables, we don’t have a solution as to where the energy should go, we are blindly focussing on installing more renewables onto the grid. At some point in the future, we will figure it out [demand balancing], we have already figured this out with bitcoin mining, and that is where Bitcoin mining in Europe can have a big role.

Industrial-scale heating

Lauri Pispa

So we are doing demand response in Finland. The AFRR is more of a Netherlands thing at the moment, it is also in Finland, but we are concentrating on the FCR-D Up (Frequency Containment Reserves). When the activation comes from the grid operator, FinGrid in Finland, we need to shut down from 2.5 seconds to 7.5 seconds, and then we need to get our power back in 15 minutes. The payment for this is quite a lot, and like you said, there are not many who can do this. 

It is mainly hydro plants and E-boilers, but now the rules have changed, there are more shutdowns so it is getting harder. Grid balancing is one thing we can do in Finland, but heating is the main opportunity. In Finland, 44% of the heating is produced by district heating, so every small city has a district heating plant. It is not connected to the neighboring one so every city has its own. It equates to something like 33 TWh in a year. So something like 6000 to 7,000 MW every second is being used, and 88% of that is being produced by biomass burning, the fancy name for sawdust that comes from the paper industry. It is a good thing since the EU has labeled it ‘Green’ because trees grow back. But still, you are burning, so it causes a lot of CO₂ emissions.  

Finland aims to be a carbon-neutral country by 2035, the district heating facilities are a big part of this. They need to find other solutions, other ways to produce heat, and this is where we come in. The electricity production in Finland is 100% based on renewables, it’s nuclear, wind, solar, and hydro, so we are closing the last coal plant next month, it will be on reserve. Then we will only have renewables, so we don’t have to find renewable sources, but we do need to tackle the higher electricity price compared to the USA, Paraguay, or Africa. 

Since we sell the heat to the district heating networks we can get 1.5 to 3.5 cents out of it and you could buy electricity for something like 3 to 4 cents. So if you deduct this and add the demand response payback, we can get close to zero. That is what we need to do to compete against everybody else, figure out ways to increase the use of heat in more places. In addition to district heating, there are greenhouses and huge industrial complexes that can use the heat too.  

The only problem is that we need to educate and show that Bitcoin mining is good. Every megawatt of use reduces 1,500 tons of CO₂ emissions If we move away from burning biomass. It is a no-brainer for district heating companies, and others, because we give them CO₂ emission-less heat, at a cheaper price than they can produce themselves. 

Kent Halliburton

Before we go on to Willem, I’m curious because district heating is a relatively new concept to me, and I suspect it is for many in the audience as well, what is the history of district heating?

Lauri Pispa

Okay, so there is a huge power plant in every city. They have a reactor or a turbine that they burn the biomass in, and in some cases, it can produce also electricity but in others the plants are old and just produce heat. The price for this has increased quite a lot because of what is happening in Ukraine. So, we can’t buy it anymore from Russia and the price of biomass has gone up significantly. The district heating plant needs to produce temperatures of between 80 to 100°C. A pipe runs to every household that wants to be in the network and it goes around the whole city. It is a pretty simple concept. 

Kent Halliburton

So it is another utility, in the same way, we have water, gas, electricity, and sewer.  Heat as a utility is an interesting concept and makes sense how you can plug the heat output from your mining operation into that to help offset how much biomass needs to be burned to heat the entire District.

Lauri Pispa

District Heating is in multiple countries, of course in all the Nordics but also Switzerland and Canada. So it doesn’t stop in Finland, you can use this approach in multiple different countries, mostly Northern climates.

Kent Halliburton

Willem, how about you, what future opportunities do you see available for Bitcoin mining with your organization?

Water purification and mineral harvesting

Willem von Royen

So, the issue District heaters have is March, they have to shut down, as you don’t have a base load demand for heat. So what we are saying is if you have extra power, you switch from heating water to purifying it. Instead of burning biomass, where you have a nuclear power plant that’s just generating too much energy, just move that into purification because we could all benefit from a cleaner Planet. The water out there is toxic, it’s very bad, so that is one of the problems we’re trying to solve, to disrupt water purification using Bitcoin mining as a tool.

Kent Halliburton

You mentioned something interesting in the last answer you gave, about opportunities with lithium production and other kinds of minerals. I am curious to know more about those and how they impact the battery industry, for example.

Willem von Royen

Kent Halliburton

So basically over time, Bitcoin mining harnesses more energy, and I use the word harness intentionally because I think that it is incumbent on us as an industry to stop saying we ‘consume’ energy because I think that’s a false paradigm.  We are harnessing the energy and generating economic value.  What I hear you saying is that as we grow that energy base, as the network price grows, and the hash price grows, there is this economic opportunity that we can remove a lot of the drying ponds, and all the different things that we are using for water separation. So, Potassium salts (potash) for fertilizers, that can help feed us directly, could come from a byproduct of Bitcoin mining. That is incredible! 

Getting hotter

Bert deGroot

So the question about the future is high temperature, that is the issue we all have. It is partially being solved with higher temperature [ASICS] machines that can achieve temperatures of 60 or 70°C, and at some point, they will even reach boiling point. I think that will be the critical thing where we will see Bitcoin mining being implemented more and more in the built environment. Currently, we have a master’s student at MIT who is investigating 62°C input temperature into an elderly home, where a high temperature is required because the elderly home cannot be refurbished, it’s an older building. So, the temperature that has to go into the system has to be this high, meaning we can replace natural gas with an installation of around 80kW Bitcoin mining rig, which would make sense. 

Most people would say “a heat pump would be better here”, but when you move to higher temperatures the efficiency and cost of running a heat pump are relatively high. This makes the business case for Bitcoin heating better than for heat pumps. When the Master’s thesis is completed, we would like to build this setup as a test case and implement this more at other sites. The future is increasing the working temperature of the ASIC chips so that they can be implemented in industrial processes. As you move the temperature scale Bitcoin mining becomes more competitive, compared with heat pumps. So, yeah we will see growth in Bitcoin mining especially when we are using these high-temperature chips.

Lauri Pispa

I wanted to add that legacy data centers already produce District Heating and other types of heating. For example, in Finland, and other countries, the efficiency is around 30 to 40% whereas we reach almost 100%, so there’s a huge difference between us and them.

Perspectives on the major blockers of progress

Kent Halliburton

So as I’m sitting here listening to all you guys a couple of things are coming out of the conversation. One is that there are some challenges, that need to be overcome for us to continue to proceed to grow and innovate beyond what you guys are already doing. One of those is education. Another, I hear, is an engineering problem how do we concentrate the heat, right? How do we get to those higher temperature levels? I’d love to hear your perspective on what the major pain points or blockers are for you to progress and grow your businesses further.

Temperature limitations of miners

Jelmer ten Wolde

Yeah. I think there are a couple. The first one is indeed the temperature range. So before WhatsMiner came out with their immersion models, the generic temperature outlet that you could achieve was 60°C, which is considered very low in the industry and very difficult to integrate as a “secondary heat source”. Right now we can get to 68-72°C and people are experimenting with 78-80°C.  That is considered to be high, into the range of high temperatures that would solve a lot of the issues of integrating your system into an industrial heat application. 

Secondly, I think one of the most complex things is commercial. So if, for example, you look to integrate with a district network, the main issue they face during commercial discussions is that if you preheat their power plant, they will use less fuel. You might say “but that’s the whole reason you’re doing this, we want to reduce CO2”, correct? However, they also produce electricity, they made a legacy investment that they want to amortize over 15 to 30 years, the moment they start producing less electricity the return on investment is decreased. They often split the electricity distribution entity from the heating entity so there is a conflict of interest between those two parties making it difficult to align all the interests of all parties combined. It’s the same with greenhouses, we do a lot with greenhouses, they have gas engines that create electricity so at the moment that there is an arbitrage they give you the electricity and they could also sell that electricity so there is commercial value. 

People tend to be very focused on those outlier opportunities and say “Hey but I could make €200” but that is only one hour in the day and they forget the other 23 hours. So for us, it’s primarily about finding the right combination of different commercial frameworks that ensure everyone is aligned, everyone is happy and everyone gets what they want. So we can make a project where all stakeholders are satisfied, that was primarily the challenge over the last two years, to find out how the commercial framework looks. In my opinion, we have defined it now and we are executing upon that framework but in most conversations that is the bottleneck.

Political resistance

Lauri Pispa

Same issues again. One more thing that is good for the heat company, the greenhouse, and the industrial complex we are warming, is that we plug into the same electricity connection. In Finland, the monthly fee is high, so the more consumption you have, the less you need to pay, so we enter providing them cheaper heat, CO₂ emission-less heat, and even lowering their transmission fees because we plug into the same connection. So there are three pros for them.

At the moment I would say the only problem is to turn the heads of the politicians, because in Finland each district heating company is owned by the city, and politicians are on the board. We have been negotiating for years and you might ask well “If you get to like zero cents of energy price why isn’t everybody?” Well, the answer is it’s just not that easy to walk in and say “Hey we’re going to do this”.  They are very conservative and have done these things for the past 20, 30, 50 years and this is a very new thing. You need to not only show that it’s working but it’s proven, so to me that is the hardest part for us. 

The temperature is the second thing, we need from 70°C to 100°C water. We have in some cases heat pumps, but the heat pump is the most expensive cost in the whole project, so of course we prefer not to have the heat pump. So we are trying to figure out different ways, for example, using the district heating to return water, just like preheating. That is one option, but then of course they pay less, so you would want to produce water that is primed enough so they can use it directly in the network.

ASIC efficiency at high temperatures

Willem von Royen

Okay, so the problem with Silicon, like computational Silicon, is that at 190°C it ceases to be a semiconductor, it’s just a dumb conductor. So that’s the limit for silicon. There’s a lot of research in using different materials like Gallium nitride or Silicon carbide which have junction temperatures up to 650°C, which is 200° above nuclear-safe shutdown!  The lithography processes are still low for these materials. So the hotter you get, the more application you have. 

So, our absolute limitation at the moment is 185-190°C where you no longer have a smart element anymore, it’s just a heating element. So, yeah, that’s our limitation and we can lean into that because there are loads of applications [for heating] up to 190°C.

Kent Halliburton

So, we’re faced with this challenge of not only chip efficiency in terms of energy efficiency but also with the physical limitations within the chips themselves. It seems that is what is keeping us from going higher with the temperatures and reaching more applications in the heating area, fascinating, how about you Bert?

Moving to sources of excess energy (decentralization)

Bert deGroot

So, a different issue, if you look at the mining rigs that we use, they are all relatively large scale. So, if we want to do this on location, especially in Finland, there is a lot of solar and so people have excess electricity. In the future, they will probably put a battery in place, but you want to utilize the battery fully, so a lot of the time of the year you have excess electricity. You want to match this excess electricity with the miner, miners at the moment are not modular for smaller-scale operations, so we don’t have efficient couple hundred-watt modules that we can just plug in and steer based on this flexible load.

Using home assistant we make it work with the current firmware integrations, but it would be nice to see more development on that side so we can bring the bank home to the people.  There is a lot of excess electricity, especially in Europe, local generation is not being fed back to the grid, where they shut down the generation, so let’s make use of that electricity and do it with smaller-scale solutions. That is what I hope to see scale because that would also be cheap.

Current limitations of ASIC chips

Willem von Royen

When you are looking at heat applications, when [ASIC] chips get hot, it’s not the heat so much that causes the damage, it’s thermal stability. So, when you make a chip hot and then it becomes cold, there is expansion and contraction of the physical material that causes damage. So as long as you can keep it at a specific temperature you can compute at 150°C, but keep it there, stabilize it and that’s why we’re doing it. It is not a cooling system, it is a thermal management system so that’s the problem that we’re trying to solve.

Lauri Pispa  

I think in hydro [water-cooled] system because the water temperature is starting to get high, but the PSU is on the limit. So, I think the machine can handle it,  but the PSU is on the limit so we need to test more and figure it out, I think we’re waiting for your system, [Willem] we are very keen on it.

Willem von Royen

That’s why we built it. I mean that’s the whole thing, the whole design around this was how do you make it stable, how do you make it cheap, and how do you make it fast in that order. It has to be those three things otherwise it’s not viable, so yeah, I think we’ve achieved it but time will tell, it’s definitely very modular.

Jelmer ten Wolde

But I think that’s the primary problem we all face we are brute forcing an application that’s not been designed to do what we want it to, into a mold of heating. When I started doing this in 2018-19, we just took the miners modified them rammed them in immersion at temperatures they were not generally very healthy. The S17s had quite a few issues at that stage, but we needed the heat and couldn’t go at lower temperatures. You see the efficiency drop in your miner chips, so you mine not at 90 J/TH but at 29-31 J/TH. There are downsides to heating with the current miner ecosystem, there are developments right now that are going to change this.

There are multiple organizations, and companies, working on miners that can handle higher temperatures, and chips that don’t lose their efficiency at that level. But it’s also the PSU that needs to be able to handle it and all the components inside, I think we are getting there, and with microBT [WhatsMiner] putting their weight behind this, stating it as a strategic mission of theirs, this will eventually change. They [MicroBT] are the market makers right now, they are controlling the market, so if they say this is what we’re going to do, at some point, it will happen. This might take 5 years, might take 10 years, but it is going there, the miners will change. Then we don’t have to modify the miners into some Frankenstein solution, we can take off-the-shelf solutions and focus primarily on building, generating, and decarbonizing the grid.

The common misunderstanding concerning Bitcoin mining

Kent Halliburton

Beautiful. Well, I mean, really what I’m hearing and gathering out of this conversation here today is just how substantial the engineering problems are and how there is a huge amount of opportunity for us to optimize mining around heat, which we have barely scratched the surface of. I think this is a fascinating topic. We’ve got just about four or five minutes left here, and I’d love to go around the panel quickly and have you guys wrap up by just sharing with the audience something you wish was commonly understood about what you’re doing.

Jelmer ten Wolde

It’s a tough question. I think what would be great for us is if people understood the ‘why’. In the Bitcoin industry, all the miners, or most of the miners, let me paraphrase that, don’t understand the ‘why’, because they go out, they find the site, they put down their miners, they don’t care, they run it, they don’t care, they look at their margins, they’re happy, and they go home to their wives, to their bed, and they don’t think about this for any second. But we are addressing an issue here. We are addressing a problem in the EU and having a very technically viable solution. You know, certain companies in the mining industry are now slowly starting to put their weight behind this, which is also allowing us to tap into deeper capital pockets and do this at a much larger scale. I think in the next year or two, a lot will change, and then the why will become much more known and understood, and also perhaps a vantage point for discussions on why the others are not doing it.

Lauri Pispa

Yeah, at least in Finland, we are close to Sweden and Norway, and what happened in Sweden and Norway was that these miners came, and since they were using spare electricity and they weren’t able to transfer it [heat] to, for example, Southern Sweden.

In politicians’ minds, you’re just using the energy and you’re not using the heat, so that is why they introduced a data center tax, which now makes it harder to mine, it makes it harder for everybody even the legacy data centers. So we need, to not only mine, but to use the heat and demand response and all of this. 

We are still a young industry and we need to show everybody that we are worthy and can help people also. I think it’s great what everybody is doing here and this is just a small part of it, we are all from the heat world but everything I heard before, there are so many different things that Bitcoin can do and it is great!

Willem von Royen

Okay, so the thing is, as a company FlowSolve, we acknowledge that we simply don’t know everything. We can’t know. We have some very obvious applications for the heat but the reason we built this, like it is, is that a user of a Bitcoin miner might have a different use case for it. So it is our remit to make it easier for you to apply that computational heat to your own use case, whatever that may be, and of course, we can’t always know that. And yeah, we want to see your stuff being built.

Kent Halliburton

Fascinating. So you guys have built a primitive that then others are going to use to build on top of.

Willem von Royen

Exactly. It’s like Lego, like building blocks, so you know you decide how it’s going to work for you. Yeah, I’m excited to see human creativity on this one as well. How about for you, B?

Bert deGroot

Yeah, as I said, I want to bring the bank home. So I would love to see that we integrate mining close to home for many people so that you see the bank back in the local areas again. The physical touchpoint of Bitcoin is often forgotten, and just having every city, let’s say rural area, or wherever there are communities, we could build solutions where the physical touchpoint of Bitcoin makes sense. 

So, thinking of Bitcoin bathhouses, thinking of the district heating, thinking about excess electricity which we cannot put on the grid currently because the grid is not capable of handling it. These kinds of things make sense and when we scale up on that, and Bitcoin is integrated into that story, then people physically feel and see what Bitcoin is doing. Of course, on the other side, Bitcoin is solving a lot of other issues that are good for the environment because it takes consumption down but we just physically have to show this narrative of ‘boiling the oceans’, that it is positive because we need more energy generation. Bitcoin is going to facilitate this and we can bring that back home, so that’s what I hope to see.

Jelmer ten Wolde

In two years, the crowd will be as busy as with the Michael Saylor talk except it will be all about heat.

Lauri Pispa

I wanted to also add, that we need to work together even though we are somewhat competing in the space we are in. So, in the early stages, with everything that we can still share, and you are not my competitor, you are potential collaborators. There are so many places we can go to, so many projects, and we have so much heat to produce, so much.

Bert deGroot

It’s all about proof of work, right? And all of us are engineers, so what we like to do in the end is build something, run it for quite a while, and then show it. That’s the way we do it. We’re not marketing machines, we just want to show that it works. So that’s how we are moving forward and we need to cooperate more. So, on a very tiny scale, what we saw in the Netherlands was we had a small mining group, just a couple of people, and that grew rapidly to hundreds of people, and they are all doing this at home and sharing everything. That is how we exponentially grow the knowledge and that is how it is going to be implemented in the space. So it will grow exponentially, and that’s what we need.

Willem von Royen

I think the biggest respect you can pay an engineer is to run their hardware. We look forward to that, and, you know the future is bright and hot. Bitcoin is so hot right now. 

Kent Halliburton

Wrapping up here, I’d like to just point out that this is proof of human ingenuity right here on this stage. I mean, what these guys are doing is the future for all of us in Bitcoin mining, I am bloody proud to be here to see it and sit on the stage and learn more from you guys. So, thank you so much. Thank you.

Summary (by Troy Cross)

Troy Cross

Isn’t that cool? I think these guys undersell what they’re doing. 

Willem is distilling water with Bitcoin mining. I’m flabbergasted. If it works, if it scales, that’s insane. How many regulators have even thought about the possibility of distilling water with this thing that they think is evil? Zero. 

There is more to come because we do a lot of things with low-grade heat. We do a lot of different things: electrifying heating, mitigating methane, balancing grids, incentivizing renewables, incentivizing new build-out of energy. Just think about what you’ve heard. 

This is what’s weird: there’s a lot of reputational risk around this industry, a lot of reputational risk. I know a lot more stories than I can even put up here because some of the people doing this stuff don’t want to jeopardize their relationships in business or with the government. After all, the B-word trips people. So we have this weird catch-22. We have incredible stories, we have incredible facts, but we can’t even tell them all because it would jeopardize relationships, because of this weird stigma attached to Bitcoin mining. 

I mean, frankly, it’s crazy. I’m a philosopher. I teach epistemology and metaphysics. Epistemology is the study of knowledge, and I teach social epistemology. This is a weird social epistemology phenomenon. We know things collectively, not just as individuals, and our collective knowledge system is malfunctioning. Part of what we are doing here, trying to do, and maybe you can be a part of, is fixing the social epistemic dysfunction. That is what we’re trying to do. 

This is an amazing story that you just heard. Where does mining move in the future? Well, if you’re not making use of heat, your waste heat, and others are, and they’re getting paid for it, you’d better have some cheap power. You better be getting some other revenue stream, right?

So part of the epistemic dysfunction is that we formed ideas about what mining is during a particular time and place, that was China banning mining, booming the price, everything moving to the US, huge data centers, and not paying much attention to the price of power. But what you’re seeing is the future of mining moving to the edge of the grid, moving to alternative revenue streams, and that’s the story we have to tell.

Follow the panelists: Kent Halliburton, Bert deGroot, Willem von Royen, Lauri Pispa, Jelmer ten Wolde
Watch the original content: Click here
Also read: Crossing The Chasm: Early Adopters To Mainstream

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