US Bitcoin Mining Shows Growth for Years to Come – Sabre56’s Phil Harvey

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(Kitco News) – Bitcoin (BTC) is again in several places. BTC exchange-traded fund (ETF) applications have been submitted by some of the world’s largest asset managers, including BlackRock and Fidelity, but the price continues to struggle to overcome the $31,500 resistance.

As bulls battle to propel the price higher, one area of ​​the Bitcoin ecosystem that is firing on all cylinders is the mining sector, which has been bolstered by the recent rise in hash rate and mining problems.

According to data provided by Bitinfocharts, the hash rate of the Bitin network hit a new record of 465.015 exahashes on July 8, while data from CoinWarz shows that the Bitinfocharts hashrate is currently at a peak of 53.91 trillion exahashes.

To gain more insight into the current state of Bitcoin mining, Kitco Crypto spoke with Phil Harvey, founder and CEO of Sabre56, a leading hosting provider and digital asset mining consulting firm that recently announced a deal with Archon Energy for a newly acquired data center in Hannibal, Ohio, an Australian data center infrastructure provider.

While many in the crypto industry like to recall the events of the past two years, Harvey said they were a “transformational time for the Bitcoin mining industry” despite the collapse of FTX.

“The industry is growing and strengthening as professional players and institutional money enter the market,” he said. “Crypto winter accelerated this trend by correcting unsustainable operations. The victims were miners like Core Scientific, Compute North and Celsius, who bought overpriced machines during the bull run and promised to deliver the facility.”

The rest of the companies had “well-planned crypto mining operations” that helped provide a buffer “for short- and medium-term Bitcoin price fluctuations.” For example, Sabre56 has mining profitability data that states in 2013, “Revenues are remarkably stable over cycles.”

“Mining players who stay in it for a long time and are well capitalized did not stop expanding during the crypto winter, but on the contrary,” he said.

Sabre56 is currently focused on building its own hosting facilities in Wyoming, Ohio, and Texas, and Sabre56 says it “has the goal of professionalizing the Bitcoin mining industry everywhere.”

Optimism in the mining industry

As for the mood in the US Bitcoin mining industry, there is a lot of optimism due to Harvey’s rapid growth rate. “Fortunately, the regulatory conflict between the SEC and Binance, Coinbase and many other crypto companies will not affect the mining industry too much because it relies heavily on Bitcoin mining,” he said.

“If anything, Bitcoin has strengthened the woes in other quarters of the crypto economy, since the status of the currency is undisputed by the SEC, this opinion for years,” he added. “Bitcoin bullies from the likes of BlackRock’s Larry Fink reinforce this advantage.”

Unlike regulations related to the purchase and sale of cryptocurrencies, which are handled at the federal level, Harvey said, “state and local laws, as well as cooperation with local governments and utilities, will determine whether projects can be successfully implemented. Federal laws have little relevance to miners’ jobs.

“Wyoming and Ohio have been very welcoming to new mining operations, and that goes from the state level — with strong supporters like Wyoming Sen. Cynthia Lammis (R.) — to stakeholders in city and county governments,” he said. “And despite attempts by the Texas House of Representatives to take a more restrictive stance, the symbiotic relationship between grid provider ERCOT and Bitcoin miners continues to make the state an attractive destination for mining operations.”

After securing $35 million in project financing to build level-zero blockchain data centers in Wyoming and Texas, Sabre56 has completed construction of two facilities in Wyoming, building their Ohio facility and secured a location in Texas.

“In May, we concluded a multi-site agreement with GM Mining, like Sabre56, which is run by executives with a military background, and installed 4,510 of the company’s S19 Antminers in our new Level Zero blockchain data center,” he said.

Outlook for Bitcoin Mining in H2 2023 and beyond

When asked if Bitcoin’s problem is continuing, Harvey predicted that mining problems will continue to break records as more computing power comes online. “This is nothing new,” he said.

“One of Bitcoin’s smart tactics is to encourage efficiency in mining – making the blockchain more secure in the process – and ensuring the mining infrastructure continues to keep pace with Bitcoin’s growing relevance in the global economy,” he said. “As chip technology and computing power become more and more capable, there is no hard cap on difficulty and hash rate. It is limited to the number of miners employed.”

“Institutional investors into bitcoin mining is the current market trend,” he said, adding that the number of hired miners will continue to increase in the future.

“We’ve had a lot of conversations with big investors who have been on the sidelines for a while, watching closely how the market has transitioned from an amateur mine to a promising infrastructure industry,” he said. “Now, many of these players are negotiating with proven operators and providers to hire capital to build more efficient, professionally managed and greener blockchain data centers.”

Harvey emphasized that it is not just institutional money that is showing interest in Bitcoin mining, as utilities and governments, particularly in the MENA region, are “moving to take a stake in this emerging economic sector.”

Regarding the future of Bitcoin mining in the US, Harvey said, “Blockchain Data Centers are the infrastructure behind Bitcoin (and some other digital assets), and as long as the crypto economy continues to grow and evolve, there will be demand for these data centers.”

“It’s often assumed that blockchain data centers are purpose-built for Bitcoin mining and are absolutely fungible.” “Computing power is already an important commodity, and its importance will only increase as AI and high-performance computing applications enter the commercialization of industries. With these drivers, strong industrial growth is a safe bet for years to come.”

Sabre56 looks to support the industry’s continued expansion by providing consulting services to miners and investors, helping them deliver high-quality mining rigs, providing data center designs from technical drawings to advanced thermal management systems, and finding suitable locations to build data centers.

The company is focused on developing positive relationships with the communities surrounding its mining operations. In partnership with “Plan C/Plan Capability,” Sabre56 only hires former US military veterans to work on site. We are set to hire more than 150 veterans in Texas, Wyoming, Ohio and other states over the next four months – enabling them to thrive in their post-service lives,” said Harvey.