The coronavirus pandemic has proven rather devastating to the bitcoin mining community. Many have had to shut themselves down given that they are not considered essential businesses. However, some of these companies – like Layer1 – are finding new ways to make a profit while the virus continues to meander across the globe, and these ways are proving to be quite innovative.
Layer1 Is Staying Innovative – and Profitable
Several cryptocurrency mining firms – such as Digital Farms in California – have stated that they were forced to close their doors during this harsh economic period while their workers were either furloughed or operated from a remote location. Sadly, Digital Farms and other mining companies had to shut down given that they were not a restaurant, supermarket or “important enough” retail location.
Others, such as Riot Blockchain, have sought to remain open, but fully admit that they’ve suffered financially during this time. It’s hard to stay in operation during times like these, but Layer1 is finding a way to do it. If it cannot mine bitcoin, it will lend out the energy it owns indirectly to other companies who might be running short.
Layer1 is backed by billionaires like Peter Theil. The company has power supplies that it can sell back into the grid for approximately $200 per megawatt hour, and this is considered low by both national and international standards. Texas boasts some of the lowest energy costs in the United States, which is why large mining companies such as China’s Bitmain initially wanted to incorporate some of their operations within Texas’ borders, though it looks like those plans have failed to come to fruition at press time.
Still, however, that doesn’t mean the Lone Star state doesn’t have a lot to offer other mining firms, and Layer1 has thus far managed to increase its profit margins by roughly 700 percent over the past several months by selling some of its energy back for other companies to use. The company also contributes in an environmental sense by ensuring that electricity doesn’t get wasted.
Some Barricades Are Still in the Way
Brian Janous – general manager of energy and sustainability at Microsoft – commented on the positives of what Layer1 is doing by saying:
Flexible loads and devices are the key to getting beyond 50 percent renewables. It’s a necessity. To get to 70 percent, 80 percent or 100 percent penetration, you need to orchestrate everything attached to the grid.
The only problem with the present system is how many regulations are in place. As it stands, several states – including Texas itself – is vulnerable to monopolies and other tight-knit laws that prevent certain companies from taking advantage of the system to protect their own revenue flows, though in taking advantage of both wind and solar energy, Layer1 has the opportunity to give back while also making some extra bucks for itself here and there.