Layer1 will receive $ 17 million per year for the willingness to suspend bitcoin mining

Layer1, a Texas-based Bitcoin mining startup backed by Peter Thiel, will start making moneypossible shutdown of equipment. It is reported by Forbes.

San Francisco company begins operationsBitcoin mining in Texas this February. Layer1 has launched several mining containers with a liquid cooling system with a total capacity of 2.5 MW.

«Bitcoin mining is the conversion of electricity into money»,— said co-founder and CEO of Layer1 Alex Liegl.

According to him, the cost of production of 1 BTC is about $ 1000. The company plans to bring mining capacities to 100 MW by the fall.

Texas summer experiences peak periodselectricity consumption due to the operation of air conditioners at full capacity on the hottest days. At this time, wholesale electricity prices in the power grid managed by the Texas Power Reliability Board (ERCOT) are multiplying. In the busiest week of 2019, they jumped from $ 120 to $ 9,000 per MWh.

The startup entered into so-called demand response contracts with ERCOT. Layer1 undertook to shut down the equipment upon notice, freeing up 100 MW of load for the network.

«We act as the insurance underwriter for the power grid. If there is a shortage of supplies, we may shut down»,Liegl explained.

For the willingness to stop mining, the company will receive a premium of $ 19 for each MWh of its expected electricity demand - about $ 17 million per year.

According to a press release, the company has already completed the installation of demand response technology according to ERCOT standards.

«Layer1 is the first company in the worldBitcoin mining industry, which can cut large amounts of energy consumption during periods of market demand and release it into the network with the click of a button,Liegl said.

Recall last fall, financing, the market value of Layer1 reached $ 200 million, after attracting $ 50 million from well-known venture investors, including PayPal co-founder Peter Thiel.