Foundry's Plan for Mining After China

Eight in the morning, a decent crowd, and Kevin Zhang of Foundry Digital joking that he had either found the passionate ones or guilted the rest into showing up. This is a session from Mining Disrupt Miami 2021, recorded July 20 and 21, 2021, when Bitcoin traded at $32,125. Today it is $83,079. Zhang, Foundry's head of mining, laid out how the company was built.

Foundry was formed at the end of 2019 by Digital Currency Group, the parent of Grayscale, Genesis and CoinDesk, to fill the one gap DCG had: infrastructure. At the start of 2020, with markets shaken by the coronavirus, Foundry used its balance sheet to bring ASICs into North America and finance them for miners. Zhang was careful about the motive. In his words, "this isn't about anti-china it's about anti-centralization." By the end of 2020, he said, Foundry had financed nearly half of the latest generation of machines coming from Bitmain and MicroBT, the S19s and M30s.

The company could have kept those machines for its own mining at one or two big sites. Zhang said that would not have moved the industry forward. Instead Foundry worked with 23 hosting sites and 17 providers, and offered financing to facilities with old equipment or empty shelves. Then came the pool.

More than 90 percent of the network's hashrate, he said, had pointed at Chinese pools. At the start of 2021 Foundry launched Foundry USA Pool, based in Rochester, New York, paying miners through FPPS, so rewards arrive whether or not the pool gets lucky. Zhang also pointed to the pool's data on energy. He said it backs research showing Bitcoin mining uses less than a tenth of one percent of the world's electricity.

The timing of the talk mattered. In the two months before it, China's crackdown had shut off more than 90 percent of the Chinese hashrate and hosting capacity that had been online. The bottleneck, Zhang said, had moved from buying machines to finding open hosting capacity, and that cannot be built overnight. He expected critics to say mining was now centralized in North America, and he answered that the United States and Canada regulate at the state, provincial and county level, unlike China's top-down rules, with states such as Kentucky, Wyoming and Texas supportive of mining.

His last point looked south. Hot, humid regions in South America, Africa, Southeast Asia and Australia were passed over because air-cooled miners struggle there. Immersion cooling, held back by its capital cost, could open them up, and Foundry wanted to work with the vendors building it. The full story is on Mining Disrupt at miningdisrupt dot com, and many more like it play around the clock on Bitcoin Radio.