EXCLUSIVE: Terawulf CSO Talks Zero-Carbon Bitcoin Mining and the Opportunity in AI, HPC

Bitcoin has been on a steady recovery since falling below $55,000 about two weeks ago amid the German government’s massive $BTC selloff, and along with the digital currency’s steady climb, the spotlight has also shone brighter on the industry behind the coin’s life: Bitcoin mining .

Bitcoin mining – the backbone of the network

Mining Bitcoins, which involves the complex process of miners discovering new blocks, verifying transactions and earning $BTC rewards through competition, has long been under the watchful eye of environmentalists who have accused the industry of harming the environment due to its high energy consumption and emissions.

However, a large number of miners have transitioned to zero-carbon operations and some, such as the infrastructure-focused Bitcoin mining company Terawulf, are very close to becoming a 100% zero-carbon operations firm.

Kerri Langlais, chief strategy officer of Terawulf, shared in an exclusive with International Business Times how the company has been working towards its sustainable operations goals and why diversification is critical for the industry at this stage.

Location is everything

The transition to more sustainable mining operations can be very expensive, especially for smaller miners. When switching to renewable energy sources for more sustainable operations, Langlais noted that “location is everything.”

“Most renewable energy sources are located in remote rural areas where there is typically a demand/supply imbalance, requiring efficient utilization to avoid waste. Bitcoin mining is location-agnostic and operates independently of time constraints. It optimizes for cost- effective power sources, making it highly adaptable within the grid,” she said.

Powering the hardware to uncover new blocks is the most expensive part of Bitcoin mining operations. To help reduce transition costs, choosing cheaper energy sources is a way forward.

According to the International Renewable Energy Agency (IRENA), renewable power has become more competitive in recent years. “About 86 percent (187) gigawatts of all renewable capacity newly commissioned in 2022 had lower costs than fossil fuel-fired electricity,” it said in a mid-2023 report.

Renewable resources from a strategically chosen location can help optimize Bitcoin mining operations, helping miners balance their expenses with the growing competition since the April halving, Langlais said.

As of July, Terawulf uses 95% carbon-free energy sources, including nuclear, hydro and solar power to power its operations. The ultimate goal is to utilize 100% zero-carbon energy.

Find opportunity in power competition

Since the halving that split mining rewards in half, competition has soared and some small miners have struggled to maintain operations due to high operating costs. Another competitive wave has taken over the mining sector as the demand for artificial intelligence has doubled the work for data centers.

Langlais acknowledged that “competition for energy resources between Bitcoin miners and AI data centers is intensifying.” She said the competition has led AI data centers, such as those led by “hyperscalers like Microsoft and Google,” to quickly secure any available power capacity, leaving crypto miners with scarcity and increased costs.

Instead of getting caught up in the competition, Terawulf found an opportunity in the chaos. Due to its substantial energy infrastructure at its Lake Mariner facility in New York ready for immediate deployment of up to an additional 300 MW (megawatts) – beyond the 200 MW of Bitcoin mining currently in operation – which in contrary to the long development timelines required. for new power supplies it has become a sought-after supplier by some hyperscalers.

Langlais noted that this doesn’t mean Terawulf is refocusing, dabbling in high-end computing businesses as demand around AI soars. “We don’t see this as a strategic shift, but rather an evolution of our nuclear energy infrastructure capabilities,” he said.

“Thinking about our $BTC mining efforts, our primary value proposition has always been the provision of low-cost, zero-carbon energy and scalable data center infrastructure. Historically, we have used this infrastructure to convert energy into power or $ BTC Similarly, we see AI and HPC (high performance computing) as opportunities to provide power, cooling and fiber infrastructure at high density and scale, converting electricity into computing power or data tokens,” she said.

Eliminating debt for a strategic future

As Terawulf balances its Bitcoin mining operations and converts electricity for computing power businesses, the company is looking to expand, especially after recently making its final debt payment.

The company now has no outstanding debt, and Langlais said it was “a critical milestone” for Terawulf to reach. It now has the financial flexibility to scale and deploy its low-cost energy infrastructure not just for Bitcoin mining, but for HPC and AI applications.

Langlais revealed that the company is seeking to expand its operating infrastructure capacity from 250 MW currently to 295 MW, with the aim of further increasing its capacity by an additional 300 MW in the near term.

Towards a sustainable, diversified future

Survival has become a challenge for many miners since the halving. Langlais said some smaller public $BTC miners have been exploring mergers and acquisitions (M&A) partnerships to stay afloat and continue to thrive in the now highly competitive environment.

There is a growing trend among traditional miners to diversify revenue as a way to survive, and for Terawulf, one such route is through the integration of HPC and AI applications into its operations.