150 Megawatts Of Hosting – 241

Bitcoin mining consulting firm saber 56 Raises 35 million to build a 150 Megawatt of hosting sites the company is Moving into the hosting business and Says it already has a waiting list of Clients they were 56 a company that Consults minors on the development and Operations of facilities has raised 35 Million dollars to build its own hosting Sites aiming to have 150 megawatts of Energy capacity ready by the end of the Year Hosting is a service that data centers Provide to crypto miners that want to Run their mining rigs without having to Build the infrastructure themselves the First four sites will total 115 Megawatts and be located in Wyoming and Texas where construction has already Begun according to a press release the Capacity will be built in 70 or 7 Megawatt to 15 megawatt of monthly Increments with the first batch coming Online in mid-march Company CEO Phil Harvey said the 35 million dollar Investment is coming primarily from Private individuals he added hosting Space for mining rigs has been in short Supply over the past few months as a few New sites were coming online in capital For development ran dry the bankruptcies Of major hosting firms like compute North and core scientific heightened the Supply issue saber 56 will offer

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Competitive pricing between 6.8 cents to 7.2 cents per kilowatt hour of Electricity consumed which right now Just as a side note because which we'll Talk about here more in a second you're We really are getting close to more of The average electricity cost being about It's kind of about maybe like 30 since Like last cycle what we're accustomed to I was going over that and it looks like Especially for home miners you're Looking at good pricing being like 13 Cents a kilowatt hour now unfortunately For comparison core scientific increase Its hosting price to just 10 cents in October as storing natural gas prices Increase its electricity cost Harvey Declined to specify the price of the Fixed rate electricity contracts that Saber 56 has signed I would assume that And he has already or already has a Waiting list of clients said the press Release Harvey specified that it is Comprised mostly of companies and Individuals already close to the company And the contracts are in the 10 to 50 Megawatt range in addition to its Projections to have 150 megawatt online By the the end of 2023 the company plans To keep adding 150 megawatt of capacity Annually for the next four years the Profits made from initial investments Will be enough to continue this further Development Harvey said quote I'm not

Interested in taking over some [ __ ] show That people are trying to sell because They're going bankrupt and can't run Their operations end quote said Harvey Responding to a question from coindesk About why his company has chosen not to Purchase an existing development from a Distressed Miner which I think is going To be the key Point here one of the Things I've talked about and I'd like to Get your thoughts on this is utilizing You know your knowledge of the Bitcoin Cycle To set yourself up into a position to Start or a strong cash position at the Height of the cycle if you possibly can To where you have the ability to start Building out infrastructure during the Bear Market kind of want to get your Thoughts on that and then obviously some More details as to what their strategy Is here because this seems to me to be a Sign of of success to a certain extent Right especially in the current market Yeah so I mean there's a lot to unpack There I mean so I've Uh talked with before with Harvey on a Couple things uh opportunities and stuff And I mean they're a smart group of Folks they built a lot of I mean if you Look at saber 56's website it shows you Know that they have been responsible of Consulting and building out close to Like 700 megawatts so they have a quite

A bit of experience they have a canned Solution that they use uh that they can Manage so I would tackle first like Taking over another operation a lot of That has nothing to do with necessarily The operation like like the design of it Or whatever it could be if it's a bad Design but like it all comes down to Where they're getting their power and What the power rate is so like or Uh yeah Yeah so that would be my question so if You have the potential of basically Having to take over that purchase power Agreement as well yeah if they have a PPA or if it's just uh some places have Just a rate like they like like what we Have here is a uh public and per a Public rate Um that I worked with the local power Companies here to try to establish right I went I'm you can go see the the board Meeting notes that I went and presented At and said here's what we need to Operate and I fought for a rate based on A energy excess that we have here Um we have a lot of wind power here uh And a lot of them are turned off so I Was like how do we turn those on and Then we establish a rate that makes Sense and then educated on just the Rationale of load balancing essentially What the capability is and then when we Would need to curtel during demand

Curves we could we could shut off and Flat you know we're effectively bringing The stack up to what's close to put Peak Is and then when we need to turn off When demand comes up we turn off right So we're able to establish a much more Aggressive rate because of that kind of Solution but it took all that agreement So we made it to where it wasn't a PPA We where we just said we would have a Certain amount online guaranteed like we Have to hold 1.5 in our current Situation and that we can have no more Than five megawatts which is a smaller Operation compared to what they're Trying to do right but it works the same Kind of way you can either get an Established rate based on you know uh What size you're trying to get to and Then some are power purchase agreements We're saying you are going to do this For five years because we want to have The guarantee those are a little more uh Risky because of how volatile Bitcoin is Right so if that rate is not medianally Lower than the majority of what people Are paying then you're going to be one Of the first out right and that's kind Of where you're looking at people that Are reliant on natural gas have stuff That you know their energy mix isn't to Where uh it's going to be indicative of The market and they're kind of they're Going to kind of get uh

Unbeknownst to them they're going to get Where the power company's just going to Have to charge them and they're going to Have this secondary rate they're like Hey our energy rate's this but now we Have this other kind of transmission Cost because we have to get power from Over here and now it's costing more so a Lot of it comes down to what can you get That rate established it has nothing Really to do with the site but you may Be able to get into where a site is okay And it's already built there's a lot to Gain from something that's already built Right you got shelving rack you get all The wiring everything's ready to go it's Just a key and you get the power right There Um but then there's also if you're doing Something at that scale you got to Consider of like you've built a process That you've trained people on and now It's a different building and it's a Different cycle and they don't have the Right stuff so you know saber builds Their own stuff right they have a design They have that they go and do and They've optimized it over years so it Makes sense that they'd want to spend Their own Um and they're doing it in a distressed Market where they can probably pick up Some cheap not just cheaper miners but Cheaper Parts as these other facilities

Are looking to dismantle or whatever so From Transformer switch gear all those Kind of things so Phil's a smart dude I Imagine that uh he's got a good plan and He's probably got a decent rate to be Able to to make sense for them to go Ahead and build us a green you know Green filled their own solution versus Having a hosting toss that's that's Lower than what the current average Electricity cost cost across the U.S is Is is pretty good I mean that does mean That they probably did negotiate Something good there I did have a couple Questions because there is when we were Talking about you know negotiating these Deals Etc the type of power company or Also plays a huge role here right Because you can have Distributors that aren't generating Their own energy and that negotiation is Going to work out a little bit Differently because they may be Dependent they may be dependent on Whoever is producing the electricity for The rates which is going to change Things up and then you have different Structures like here in Texas we have Co-ops for example you know where they They act a little bit differently Because they're they're beholden to Their members members being all of their Customers right or we have you know Non-profits as an example of some of

These that are that are uh Running or you have like a for-profit uh Energy company so there's a lot of Nuance to all of this and you probably Find different leverage points depending On what kind of company you're Negotiating with right Yeah there's I mean so it's how many how Many people are on that value stream That are taking pieces right so you got A lot of things rarely do you have Somebody that is is the creator of the Power the transmission of the power The distribution meaning like switching It out you know stepping it down from High voltage down like having somebody That owns that whole value cycle uh is Hard and rare most of them are Agreements on like transmission because They're coming from you know nuclear or Coal or natural gas Um and then you know creating that Energy mix for whatever substation you End up finding so you know like for our Instance it's a co-op uh it's a 509c It's uh which is a uh non-profit so Really it comes down to they got to Cover their bases so they they you know They have hedged agreements over long Periods but when we were going for this We had worked with them that which who Worked with the larger entity around Here it was British Patrol MVP and it Was a matter of like can you turn on

These windmills if we are going to hold The demand at this level so Um it It you start to uncover kind of like What's in the realm of possibility Um and I think it first starts with is There excess or is there potential for Excess Um to where even at Peak they still have They had overbuilt and they can't they Don't have the transmission ready so Like here in the like Illinois uh and Then to Missouri you have a lot of you Know uh earmarked like bills that had Built all of this wind power with the Concept that over a 10-year period They'd be able to get transmission out To the edges Um and that stuff just takes a lot of Time because you're going across People's property and it's like every 10 Miles you're like dealing with like Eight different people and you're like Well it looks like we got to make a left Up two miles and then go over because This person's not gonna let us go and There's added costs and all this stuff So now you have this excess because it's Easy to throw up the windmills and they Have nowhere to go with it so it's like Finding that was really was lucky Because it was kind of nearer as that But like it was just understanding okay Where is The Leverage points that people

At the end of the day they've already Made the sun cost investment like let's Turn it on and then we'd have it on Demand and then we can come down on like Peak times right so it's it was really a Learned you know Lessons Learned of Trying to like negotiate with them find Out which power company it was and then Which ones are willing to talk with you Right and I found it I look at the Smaller co-ops or smaller shops and Their motives are a little different Like versus like for-profit or like a Big public utility they're smaller and They're easier to talk to and uh you Know seeing what's in the wrong possible Yeah I think that's good Insight if you Were going to start picking you know a Geographical location taking into Consideration the value that co-ops have Right um across the board it's a little Bit different I mean it if you go the Route of like the flare gas stuff that Was going on but that kind of I think That was impacted a little bit Negatively with the increase uh cost of Natural gas right so Um well yeah and it was it depends so if It's near a Refinery Um which is taking crude or some other Uh you know it hasn't getting to the Point of like natural grass extraction Or hydrogen production or anything That's a like a gas form if it's like a

Crude and they're making Diesel and then They're making fuel oils and all these Other things there's byproducts and they Flare that off if you can grab it at the Flare point and put a you know instead Of burning it into the air just running It right into a generator and you bring In you know 1.3 megawatt generator then Now you can put like single containers There and just really expose this Already thing that you were going to Just flare off instead you're just Running it as an energy source and now You're you're filtering the you know the The expended gas so Um natural gas kind of a little Different thing Um just because now you're talking Compression you're talking another Process and you know typically natural Gas is a lot cheaper I mean we had an LPE truck here for a little bit here That I bought and I was able to get you Know uh liquid propane which is still Part of that you know process for you Know 1.49 a gallon which is way cheaper Than paying you know it was like 350 380 You know a gallon for vehicles so I was Looking at like well is there any Propane production around here because It's a lot cheaper and maybe it's you Know we can uh look into that but it's There's just a lot more process on that And it's a lot more maintenance uh I I

Feel for the guys that are in that you Know uh oil uh business oil and gas Business and It's like a It's I put it in the same realm as like Extreme immersion type of thing where if I'm just hooked up to the grid and I'm Getting a decent rate way easier if I Have this whole other operation that's Processing things it's a moving part It's an engine I have a whole other level of expense That I normally wouldn't have with the Rest of the mining so even if you're Able to you're able to get your your uh Cost way down for your power Creation With say a penny What's the sunk cost in the engineer and Maintenance Cycles on that motor and all That so then it it's all a bottom line Kind of calculation at the end of the Day so it might be something that's good For three years and maybe it's uh They're in for three and then okay now I Got a maintenance and buy a new you know Three million dollar piece of equipment Um it's an interesting kind of dynamic That I think over time we'll figure out If that was it was good Um but yeah I I like renewable like uh Solar is hard because solar only lasts For so long it can offset some cost uh But wind is this one is for sure so There's always interesting because if I

Mentioned mining to an a normal person They're like just get solar and my I'm Like it's not that it's not that simple You know I got to basically double the Size and then have batteries to run them Whenever the solar's not you know Cranking and that's an extra expense and You know it's it's a lot of extra work More parts right that sort of thing Going on so as far as core or not core Scientific but as far as saber 56 here Um One of the things that I thought was Interesting and we can kind of wrap it Up here uh on this particular topic but The 35 million dollar investment is Coming primarily from private Individuals he added this is kind of a Breakaway from what a lot of the rest of The industry definitely did through the Bull Run uh and probably for good reason Because you had a lot fail you know and And and it was because they were kind of Beholden to as a public company do you Think that that's a strategic move Intentionally by them Yeah I mean so people look for different Ways to deploy Capital Um and you could have a group of folks That just have lost confidence I mean When Genesis uh Holdings and you know Some of the institutions here in the US I mean FTX U.S uh you know people could Be like oh it's a [ __ ] Quinn Casino over

A Nifty X but like us had to go through Regulatory uh stuff to stay compliant They had books they had to keep uh Related to that you know people looking At Um you know purchasing coin you know Versus trying to Mint coin totally Different kind of a concept Um there's also some individuals I mean We've talked to some individuals that Are just like they like the basic Understanding of capturing it at the fir At coin at not confused with coinbase The company but the coinbase of the Minting of the process you know as as The inflation comes in you're the first Stop right and that and that's I I do Want to pause you there real quick Because this is a good one that I think A lot of people get mixed up on Especially when they're reading articles Distinguishing between coinbase and the Company coinbase you want to kind of Give us the the Elaborate on that more yeah yeah people Understand yeah so when when you Successfully win a block there there's a Mechanism I'll try to make this simple It is uh essentially the minting process As part of uh the distribution of the Coins it they you'll look at the coin Base where the coins are originally were Created from so every like in Bitcoin Every 10 minutes if uh we hit a 10

Minute block time those 6.25 coins are Going to have their first distribution To whoever creates that block they've Won the nons they they can now create a Block they are issued out those new Coins first positional move for those Coins all those satoshi's Um People look at there are a group of Folks that look at that as like that's The purest form of coin right there's no History you don't have to worry about Any other kind of issues like if it went Through Silk Road or any kind of other Uh history with the coin from like a Chain analysis uh chain analytics Standpoint and they're like these are Going to be all thing all coins should Be fungible right they'll like you Shouldn't look at any like I don't look At any of the coins Satoshi is a Satoshi Is a Satoshi but there are you know Federated companies uh investors that Were like I don't want to take zero risk That that coin had went through anything Because I own a company and then Somebody will look at our stack and say Hey that went through wherever you guys Are buying coins from whoever so they Look at it like I want the cleanest Version of coins that I can get I'd Rather mine them spend the money on Mining and have for fresh stack right so You have some investors that want to do

That for privacy for all kinds of Reasons because they don't want to Associate Um and pay fees to you know a custodial To then moving into maybe a custodial Wallet or move it out to their wallet And then have to do all this stuff Related to that while the community and The the government is figuring out how Things are going to work yeah from uh Registrations and stuff so the when I Look at private individuals doing that I'm looking at like they're trying to Find a partner that can help them build A farm and then that money is being Converted over to go to bitcoin right so They're they're just using it in that Way Um and that's their right to do you know Like so I I think that it comes down to The person that's searching to deploy Their Capital find somebody that can do It you know and I uh and it's it's an Interesting philosophical point there to Uh to just kind of a parallel that I Find interesting I've been reading uh or I just finished the 48 Laws of Power and One of the one of the things it talks About in there is like paying full price For everything and never taking a Discount because at the end of the day That can put you in a compromised Position you're beholden to that Individual that you took the discount

From or it could have come through a an Illegal means or whatever that may be And the idea that you're going to go Through the extra effort to mine the Bitcoin to make sure that you have that Clean you know basically completely Non-ky seed clean of any kind of past History to it is kind of that same Concept to a certain extent and I Thought that was kind of I I heard you Talk about that before and I really like That point yeah and I mean there's There's Luckily it hasn't got to this Um and has a a minor of coins right the The idea of like call it color coins or Coins that have like green history and Then some that have yellow history and Then the ones that are just absolutely Red uh like there is an a process out There like it or not that's out there Where if let's say you have like one of My I'll give you a perfect example I had An Old Donation wallet address from Thanks for checking out this clip from The crypto mining show you can check out The full episode here or more crypto Content down here also I'd like you to Check out my locals page at son of a Tech.locals.com where you can become a Member for free or choose to be a five Dollar a month supporter that unlocks Additional content

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