Bitcoin is the biggest and one of the most famous cryptocurrencies in the world. A cryptocurrency startup knows how to earn money even and has an interesting approach to crypto mining. The name of this startup is Layer1. It is a well-known fact that it is hot in Texas. However, the real heat and humidity don’t hit until August, at that time, the Texas power grid comes under huge pressure as people use air conditioners to deal with heat.
Moreover, during the intense week in 2019, wholesale electricity prices in the grid region managed by the Electricity Reliability Council of Texas jumped from about $120 per megawatt-hour to reach a peak of $9,000 MWh. It was only the third time in history that the Texas power grid reached that level.
Notably, Texas power generators make about 15% of annual revenues during the peak 1% of hours. Also, it turns out that running Bitcoin miners is a great way to arbitrage those peaks. As a result, a cryptocurrency startup Layer1 acts as an insurance underwriter for the energy grid.
It is worth mentioning that, Layer1 entered into so-called demand response contracts. For example, after a minute’s notice, this startup will shut down all its machines. This way 100mw used by its machines is released and helps to boost the grid.
Cryptocurrency startup and Bitcoin
Some people may be surprised to hear that Layer1 gets paid whether a grid emergency happens or not. As a result, just for their willingness to shut in Bitcoin production, this cryptocurrency startup collects an annual premium of about $17 million.
Last but not least, famous people such as billionaire Peter Thiel support Layer1. Also, Layer1 started to install steel boxes stuffed with high-end processors submerged inside cooling baths of mineral oil. In several months Layer1 will have dozens of such boxes installed in West Texas and they will transform 100 megawatts into a stream of Bitcoin.