Bitcoin Mining Dynamics in 2023

Foreign [Applause] Power For mining it's a shortage of Ready to use power I the missing thing Is the You know the racks and the Transformers And the cooling and the switch gear Right because The there's lots of underused power like You know not not used to its full Capacity because most Um capacity planning is based on the pqs And so it typically goes under half used In most places right so there's Typically an enormous amount of power That is not being used Continuously and so Yeah I think the gap for a lot of places Is that I mean the gap for currently is Not you know there's plenty of power Around and Bitcoin can mine anywhere It's that it takes a lot of capital To build the infrastructure so to buy The Transformers To do the electrical Installations the filtration cooling Etc I think that the Bitcoin mining sector Is under capitalized and and the reason For that is you know if you look at any Other industry like cars computers Mobile phones Etc there's a whole area of Finance Behind that which is providing factoring

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Or working Capital Loans to you know Fund the the development I mean the the Manufacturing to build inventory to sell And that's the whole cycle there and That cycle is largely missing in the Bitcoin sector because it's so new and Conventional Finance historically has You know not understood the asset class Or viewed it as high risk and so Extremely high interest rates and so you See that throughout the system right Both on a trading side on a margin Lending there's a huge gap between you Know Bitcoin related margin lending and Stock and share margin lending on Brokerages right the interest rates are Doubled it was a single digit low right And uh it's it sort of pervades the Other aspects so apart from you know the Mining infrastructure also the Manufacturer of miners you know no Miners are selling you minus from Inventory in a normal market and so they Are asking the customer to make Pre-orders and payments and stages Because they're basically using customer Financing because they can't get you Know factoring or Or any of the usual kinds of financing Um and also the foundries you know the People they would buy That they would pay to make do mass Production the actual assembly companies Are less likely to give credit like

Manufacturer credit and the foundries Are less likely to give credit because They view it as a risk uh sector and They don't understand it so I think There's things that are gradually Improving Um and some Some sort of forward-thinking people From the conventional Finance world are You know starting I'd say I would say Last year and and it's improved from There to get more active in the space And understand and provide financing so That might improve some of the liquidity Problems and I think that also underlies The you know the over leveraged nature Like people needed to expand And they needed the capital to do it and So they took it from the only place they Could which was you know the Bitcoin and The miners which was a high risk thing To do yeah no normally that in any other Sector they would have you know used Conventional corporate financing so That's that's part of that structural Like I think the Bitcoin sector Structural problem for the short term But what's happened in the last year is That last year there was You know bitcoin price was high and a Lot of people made orders for Miners and You have to prepay and pay long in Advance and so you know with the price Correction

They're still receiving the miners and There's a shortage of power so even Though mining profitability is down Hosting demand is enormous and there's a Big backlog and Equipment appreciating In data centers sorry just in storage Facilities basically new Impala on Palette as they say and so what what we Have been doing for the last year is Doing the you know the Preparatory Stages to expand to new uh mining Locations so new new sites adjacent to Or very close to large low-cost sources Of power so we have uh about 500 Megawatts across multiple sites And at a stage where we can you know put Money on the ground and build out the Infrastructure and the infrastructure is Containerized and we have a kind of Pipeline process to do it and it has Actually a you know a quite good margin But it's Capital intensive hence uh Raising money so we have you know people Queuing up To buy Power and that's across the Industry you know to to send Miners and Power them up but there's a shortage of It so we're trying to you know get Market share and satisfy that Demand With our modular deployment strategy

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