Long gone are the days when new Bitcoin could be mined using an everyday laptop. These days, it takes serious cash—and energy. If a single transaction is equivalent to what a U.S. household uses in 19 days, just imagine the electricity needed to verify a whole block.
The expense associated with mining has meant that keeping the BTC network ticking over has largely become the preserve of big companies such as Canaan Creative and Bitmain. But now, a new competitor is throwing its hat into the ring: the Digital Currency Group.
DCG, the deep-pocketed venture capital company that’s focused on cryptocurrency and blockchain projects, is betting more than $100 million on Foundry, its new subsidiary. According to an Aug. 27 news release, the venture was “quietly formed” last year.
It seems Foundry has already made quite a footprint in the crypto mining space, especially in North America, where the venture claims it has helped procure 50% of the Bitcoin mining equipment delivered to the continent so far in 2020.
The stated goal of the business is “creating greater access to digital asset mining, decentralizing geographic opportunity, and bringing more legitimacy and transparency to the Bitcoin mining ecosystem.”
To cut a long story short, this means the company hopes to help individuals and firms that are interested in getting involved—helping them build and maintain their own decentralized networks. Note the phrase “decentralizing geographic opportunity”—it’s clear Foundry wants to reduce China’s dominance when it comes to the production of new Bitcoin.
This in itself will pose challenges. China’s strong position lies in how miners can access a cheap supply of electricity. It seems Foundry plans to get around this stumbling block by basing itself in areas where power is more affordable—and by focusing on procuring equipment that’s as energy efficient as possible.
‘Built by miners, for miners’
Foundry’s CEO, Mike Colyer, said: “We want to empower decentralized infrastructure in the new digital economy, and our work will support the development and growth of mining operations—particularly in North America. We are a business built by miners for miners, and we are partnering with entrepreneurs who share our mission of advancing the industry and creating a decentralized mining ecosystem.”
For the founder and CEO of the Digital Currency Group, Barry Silbert, Foundry’s launch aligns with his company’s goal of “accelerating the development of a better financial system.” He added:
“Digital asset mining and staking provide the backbone of the blockchain technology that will drive that advancement. Foundry is bringing critical resources and guidance to an essential corner of the industry, and Mike Colyer and his team have the expertise, credibility, and integrity to support the evolving needs of miners and manufacturers.”
The launch will certainly help cement DCG’s reputation as a heavyweight in the crypto space. It’s also the parent company of Grayscale Investments, which has seen billions of dollars flow into its crypto funds after an aggressive advertising campaign.