This post was originally published on https://tftc.io by William Foxley.

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Key Takeaways

In this episode of the Mining Pod, host Will speaks with Tom Asero of Standard Bitcoin to discuss the ins and outs of bitcoin mining in the southeast United States, recorded at the Nashville Energy and Mining Summit. The conversation spans several topics, including the energy dynamics, infrastructure impacts, and a counterintuitive take on bitcoin mining's effect on the energy grid.

1. Bitcoin Mining in Southeast US: The southeast offers unique opportunities for bitcoin mining with its energy prices and infrastructure. While the public perception may be that areas like ERCOT in Texas are ideal due to low energy costs, Tom suggests that the reality is more complex, with hidden costs and grid instability potentially increasing operational challenges.
2. Energy Grid Concerns: Tom expresses concerns about the impact of bitcoin mining on the Texas grid, which is heavily subsidized for wind and solar energy. He argues that bitcoin mining might exacerbate the grid's existing issues rather than contribute positively, as some narratives suggest.
3. Mining Strategies During Bear Markets: Tom outlines his approach to building bitcoin mining operations without heavy reliance on ASIC ownership. By focusing on providing rack space and leaving the operational management to clients, he avoids the pitfalls of significant debt financing and hardware management problems that can plague miners during downturns.
4. Ordinal Inscriptions: Tom discusses the emergence of ordinal inscriptions and their potential impact on bitcoin's fee market. He highlights how this could benefit miners leading up to the Bitcoin halving by creating a robust fee market that could change ASIC allocation strategies.
5. Chinese National Security Concerns: The episode touches on recent concerns surrounding Chinese nationals' involvement in bitcoin mining near US military bases. Tom emphasizes the importance of not succumbing to fear-mongering and instead recognizing these miners as refugees seeking economic freedom in a more stable environment.
6. Future Hash Rate Projections: Tom predicts a significant increase in the bitcoin network's hash rate, potentially doubling to around 550 EH/s by December 2024, driven by the deployment of new generation machines and increased capacity at mining sites.

Best Quotes

1. "If ordinals ruin Bitcoin, we were all wasting our time anyway, so let's just get it out of the way." - Tom highlights the importance of embracing innovations like ordinal inscriptions in Bitcoin, viewing them as a potential stress test for the network's resilience.
2. "When things get hatched in bear markets, they have time to get right." - Tom reflects on how innovations born during bear markets, like ordinal inscriptions, have the opportunity to develop robustly due to the lack of hype and pressure.
3. "We're a very pro-freedom oriented country... We should be embracing these digital refugees instead of mischaracterizing them." - Tom discusses the need to welcome Chinese bitcoin miners to the U.S. rather than painting them with a broad brush of national security concerns.
4. "If you build the best, cheapest chicken shack miner, you could have an advantage of getting some access to hash rate on the hosting rates that you had. And I don't have to buy any ASICs." - Tom explains his strategy for building efficient and cost-effective mining operations without the burdens of owning and managing ASIC hardware.
5. "It's like pouring fuel on the fire... it's kind of perpetuating more of these [unreliable] buildouts." - Tom criticizes the narrative that Bitcoin mining is beneficial for the ERCOT grid, arguing that it may actually encourage problematic energy practices.

Conclusion

This episode of the Mining Pod offers a deep dive into the world of bitcoin mining, particularly focusing on the southeast United States. Tom Asero provides valuable insights into the complexities of the energy grid, the strategic approaches to mining during bear and bull markets, and the potential of innovations like ordinal inscriptions.

Despite some counterintuitive takes, especially regarding the impact of mining on the ERCOT grid, Tom remains optimistic about the future of bitcoin mining and its ability to adapt and grow. His prediction for the hash rate doubling by the end of 2024 reflects a bullish outlook for the industry.

As the conversation about Chinese nationals and national security concerns continues, Tom's perspective serves as a reminder to uphold the principles of economic freedom that bitcoin embodies. The episode concludes on a note that celebrates the resilience and adaptability of the bitcoin mining community, despite the various challenges it faces.

Texas is Bitcoin country, right? Over 2 gigawatts of energy is now mining Bitcoin in Texas, but it might be bad for the long term stability of the Texas energy grid. Tom Masiero of Standard Bitcoin walks us through why, in addition to insights on mining Bitcoin in the Tennessee Valley.

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