Layer1 Technologies made a big splash last year with the announcement that the Peter Thiel-backed startup will try to make Texas the new global hub of Bitcoin mining. In an interview with Messari’s Unqualified Opinions on Thursday, Layer1 CEO Alex Liegl revealed the company’s ambitions to control 25% of Bitcoin’s network hashrate by the end of 2021.
Owning 25% of the Bitcoin Network Hashrate
During his interview with Messari CEO Ryan Selkis, Liegl was asked about Layer1’s path towards further growth beyond their initial operations in West Texas. In his response, Liegl explained some of the company’s reasoning for operating in Texas, in addition to their expansion goals.
“Our ambition is, certainly, to scale up also with what we currently have,” said Liegl. “Really, our ambition by the end of 2021 is to occupy roughly 25% of the Bitcoin hashrate. And if you put that into numbers, it’s probably around one-and-a-half gigawatts, which is certainly, definitely what we can do in Texas in just that period of time in terms of just the power that we have available and the opportunities that we have to scale into that.”
Liegl added that it’s also in the interest of the company to diversify geographically. That could mean central Asia, Europe, the Middle East, or anywhere else. It doesn’t really matter where they operate. That said, the company will always remain a U.S.-centric business.
Notably, a December 2019 report from CoinShares Research found that 65% of Bitcoin mining takes place in China.
“Really, we’re going to scale up extremely rapidly,” said Liegl. “We’re at this position now where we effectively build these Bitcoin printers, if you will, and we can just, at our factories, build these fully-integrated containers that get shipped to our campus. And then they’re plug-and-play ready. All you have to do is effectively energize them, and they start spitting out Bitcoin. That’s the position we’re in, fortunately, right now, which makes scaling very easy because we can scale multiple megawatts per day.”
Building Their Own Chips
According to Liegl, a focus on independence is one of Layer1’s mission statements.
“At the end of the day, everybody is still kind of playing the game like it’s 2017, which is just: try to find power at scale, order a bunch of miners from Bitmain, pay a company to do the maintenance and the hosting, and then try to squeeze out a margin,” said Liegl.
One of the ways in which Layer1 plans to achieve and maintain independence is by producing their own mining chips.
“As of a while ago, we are actually in the process of producing our own chips, which we’ll have in hand by the end of the year,” said Liegl. “So, that is the assumption—that we will actually become fully independent.”
Layer1 is working with Ingenic Semiconductor in China and Samsung Foundry in South Korea on the production of their mining chips.