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In this newsletter, we summarize some of the big events from this week and will continue doing this weekly. Subscribe to get it straight in your inbox.

Watch Sebastien visiting Joe Burnett on the Blockware Intelligence Podcast. Our first podcast, talking about Block Green, Bitcoin and energy, counterparty risk, and navigating volatility ⚡️ 

Here's what happened in the world of mining this week:

• US Congress bill stating the PoW potential aid to US energy goals 💚 

• Bitfarms mined 5,167 bitcoins in 2022 👏 

• Texas lawmaker welcomes Bitcoin mining in a resolution 🤠 

• LiquidStack raised funding for US immersion cooling 🧊 

• CleanSpark released their ESG report 🌱 

Bitcoin Drops After Binance Pauses Spot Trading, Deposits and Withdrawals 🛑 

• Binance halted spot trading, deposits and withdrawals Friday morning after the company found an “issue” on a spot order, sending Bitcoin prices down about 2.5% before recovering.

• Trading resumed as of 10 a.m. EST Friday, Binance CEO Changpeng Zhao announced hours after the pause, adding that withdrawals should be enabled an hour later.

• Binance said it was aware of the issue before 8 a.m. this morning, with Zhao telling his Twitter followers initial indications show the pause was caused by “a bug on a trailing stop order” and that it was standard operating procedure for deposits and withdrawals to be halted.

• About an hour after Binance initially announced the pause, Zhao said Engine 1 was back up, but cautioned it would take time for the other engines to catch up.

• Bitcoin saw a $700 sell-off Friday morning, before recovering.

(Anti-)Bitcoin Mining Art 🎨 

Greenpeace USA attempt at creating an art piece criticizing Bitcoin mining went awry:

• Bitcoin Twitter welcomed the art by retweeting and changing profile pics.

• The artist seemed open-minded and was willing to have constructive conversations hearing another point of view.

US Congress Bill on PoW - A Potential Aid to US Energy Goals ⚡️ 

• US Congress has introduced a bill proposing proof-of-work (PoW) Bitcoin mining as a potential aid to the US energy goals and economic growth.

• Texas Republican, Pete Sessions, introduced legislation that could be vital to mining in the mainstream.

• Stating that “PoW mining is an essential process that allows for a blockchain network to remain trusted, open, and decentralized,” within the legislation.

• The bill regards mining’s importance to the United States. Specifically aiding “the United States’ ability to achieve its energy goals and grow its economy”.

• The resolution states that many worries about the practice are unfounded.

  • “PoW does require energy consumption for this validation process, many of the concerns are unwarranted, because PoW minings energy usage is transparent and verifiable”.

  • “uses .14 percent of the global energy supply,”

  • “improves the overall economic viability of renewable energy projects,”

  • “Whereas PoW mining economics are notably responsive to electricity prices,”

  • “miners can curtail operations when electric supply is low or prices are high, providing more energy to households and the grid during times of heavy demand.”

  • “to reduce methane emissions by using stranded or wasted methane as a fuel source,”

Bitfarms Released Their Annual Report 🧑‍🌾 

• Mined 5,167 BTC in 2022.

• 2023 Averaged direct cost of production of $10,000 per BTC in 2022.

• Bitfarms’ EBITDA slumped to 7.4 MUSD from 29 MUSD in the year-earlier period.

• Revenue for the quarter was 27 MUSD, roughly half the prior-year figure.

• Gross mining margin fell to 33% from 52% in the third quarter.

• President and CEO Geoff Morphy:

  • "Looking ahead, we plan to leverage our existing infrastructure in Argentina and utilize equipment credits to prudently expand our EH/s to 6.0 with our existing assets by year end 2023"

  • "With our strengthened balance sheet, we are actively evaluating potential acquisitions that we expect to be accretive and complement our geographically diverse mining operations,"

• In February, bankrupt lender BlockFi took a two-thirds loss to settle 21 MUSD of outstanding debt with Bitfarms. That helped Bitarms cut debt obligations by 86% compared to June 2022.

• Mined 20,000+ BTC since inception through Feb.

  

• Quebec, Canada

  • Completed the Garlock facility, energizing 18 MW, representing full capacity.

  • Energized the remaining 12 MW capacity at The Bunker, bringing it to 48 MW and the total to 96 MW for Sherbrooke.

  • Exploring expansion opportunities in Canada.

• Washington, USA

  • Operating 20 MW.

  • Generating approximately 600 PH/s.

• Villarica, Paraguay

  • Imported and installed 2,888 new miners, bringing the total hashrate to 288 PH/s on January 31, 2023.

  • Sold the used miners in Q1 2023

• The firm failed to reach its reduced target of 5 EH/s of computing power by year's end, achieving 4.5 EH/s.

• Bitfarms cut its expectation from 7.2 EH/s to 6 EH/s in May, and to 5 EH/s in November.

Texas Lawmaker Welcomes Bitcoin 🧑‍⚖️ 

• Cody Harris, a member of the Texas House of Representatives, has introduced a resolution aiming to have the legislature say the “Bitcoin economy is welcome” in the state.

• The state representative added that Texas’ constitutional rights concerning “all unreasonable seizures or searches” should extend to attempts to go over residents’ digital asset holdings.

• House Concurrent Resolution 89, if adopted, would largely not apply to Texas’ laws and regulations, but rather express a certain sentiment among lawmakers.

• The resolution cited the Chinese government’s crackdown on crypto miners, a move that drove many firms to Texas. Riot Platforms, Core Scientific and White Rock Management are among some of the firms to set up operations in the Lone Star State.

Immersion Cooling Firm LiquidStack Raised Series B ❄️ 

• The company says it can reduce the carbon footprint and land and water use of bitcoin miners through its technology.

• Immersion cooling technology firm LiquidStack secured a Series B funding round of undisclosed amount from Trane Technologies (TT).

• LiquidStack is aiming to announce a U.S. facility in the third quarter.

• LiquidStack specializes in two-phase immersion cooling, in which computers are submerged in dielectric heat transfer liquid, as opposed to mineral oils used in other models.

• This type of liquid is more environmentally friendly to produce and less resource intensive than air cooling, currently the most common practice among bitcoin miners.

• The two-phase system can reduce a data center's carbon footprint by over 1,500 tons of carbon dioxide equivalents per megawatt (MW).

• Data centers will also see a 40% reduction in the energy use of mechanical equipment, 33% lower capital expenditure and 32% less land use, the firm said.

• "A broader adoption of LiquidStack’s technology can also reduce water usage for powering and cooling data centers by over 300 billion liters per year," according to the press release.

• LiquidStack started out in Hong Kong, before being merged into German miner Bitfury in 2015 and then going off on its own again in 2021.

• Still, at $7.2 million per MW of infrastructure, the LiquidStack solution is not cheap.

• Trane Technologies is a heating and cooling tech firm that's been around for roughly 150 years. The company had 16 BUSD in revenues in 2022.

• LiquidStack will help Trane achieve its sustainability commitments, among them "reducing one billion metric tons of carbon emissions from our customers’ footprint by 2030 and achieving net-zero emissions by 2050." Amber Mulligan, Trane's vice president of strategic sales and marketing

CleanSpark Releases ESG and Corporate Responsibility Report 🌱 

• CleanSpark Inc. today released its inaugural ESG and Corporate Responsibility Report for the 2022 fiscal year, or the period from October 1, 2021, to September 30, 2022.

• CleanSpark completed its inaugural ESG materiality assessment in early 2022.

• This assessment, conducted by an independent consultant, consisted of a benchmark review of its peers and of leading ESG frameworks and ratings (e.g., SASB, TCFD, MSCI, ISS, and Sustainalytics).

• The Company’s bitcoin mining efforts are focused on procuring low-carbon grid-connected power that minimizes its impact on the planet.

• Clean energy accounts for over 90% of the energy mix, according to data from the power providers that supply power to CleanSpark’s bitcoin mining operations.

• Mining campuses provide “spinning reserves” that facilitate utility companies’ ability to work with the fluctuating supplies that come from renewables while improving the performance of baseline power production facilities such as nuclear plants.

• Efforts to reduce e-waste have increased the amount of time CleanSpark’s operations run at, or near, 100% while dramatically reducing shipping and packing emissions, and related waste, that comes with sending mining machines to outside repair houses.

• Large-scale immersion-cooling at CleanSpark’s data center in Norcross, Georgia, further helped reduce e-waste and increased energy-efficiency of mining machines while increasing output of some machine models by up to 85%.

Fractional Reserve Carbon Accounting 💚 

• An opinion piece in Bitcoin Magazine by Pierre Rochard.

• “This week, we learned that The New York Times is working on a story to introduce for the first time “fractional reserve indirect carbon accounting” (FRICA). It is expected to rebrand this as “marginal indirect carbon accounting” to make it more palatable.”

• Electricity producers’ carbon emissions are already accounted for as “Scope 1” direct emissions per the U.S. EPA.

• The only purpose of double-counting emissions with “Scope 2,” indirect emissions is to expand the power of government bureaucracy.

• Direct Scope 1 emissions increase carbon dioxide (CO2) in the atmosphere, “indirect, Scope 2 emissions” are an unscientific fiction.

• The New York Times has never used this method of measuring fictitious “indirect carbon emissions” for any other industry, it will be leveraging it to attack Bitcoin mining.

• The New York Times’ FRICA assumes that every incremental increase in electricity consumption always increases electricity production from a natural gas power plant.

• The absurd conclusion of FRICA is that 100% of electricity is from carbon-emitting natural gas, because any single consumer of electricity could turn off and decrease marginal demand.

• In 2022, the Electric Reliability Council of Texas (ERCOT) reported that the Texas grid produced roughly 40% of electricity from zero-carbon nuclear, solar, and wind, and 60% of electricity from carbon-emitting natural gas and coal.

• Texas is a leader in renewable energy. Even if only 1% of electricity was produced by natural gas power plants, FRICA would claim that 100% of electricity consumption is causing “indirect carbon emissions.”

Data 🌎️