The future is already here for Ramak J. Sedigh and his California-based team at Plouton mining, who have just raised $1 million from investors for their proposed solar-powered energy mining complex to be built in Western Mojave, California.
Aware that bitcoin mining is coming under increased scrutiny for its use of nonrenewable energy resources, that some see as contributing to global climate change, Plouton Mining’s website says its goal is to “set the standard for future mining operations by establishing a green, scalable, and sustainable mining solution that will benefit investors, the environment, and local utility companies.”
CEO Sedigh sees bitcoin mining as an evolving process — the necessity of finding a sustainable power supply combined with new innovations in mining technology.
What the company is calling “North America’s largest solar-powered mining centre” has a total budget of $35 million with $10 million budgeted for solar energy and $10 million budgeted for miners. It proposes to use 5,000 next-generation 7nm SHA256 ASIC Bitcoin miners.
The Challenges for Plouton’s Sustainable Bitcoin Mining
The Western Mojave is in the 92nd percentile of solar exposure, with only a dozen or so nonproducing days a year. The 50-acre project will use photovoltaic panels, with 200 to 400-plus watts capacity per panel, that the company hopes to install for less than $1/watt to initially produce 10 to 12 megawatts of energy.
At full capacity, using all 50 acres, the company is hoping to generate up to 45 megawatts.
Mining expert and co-founder of digital asset management company Full Stack Capital, Scott Howard, appreciates the need for more environmental awareness but he has his reservations.
“To me, this only plays out if you have a massive scale renewable plant that drives the electrical expenses down sub $0.03 per kWh, and you are playing a long game,” he said. “In smaller doses, stranded energy, which I have seen on North American wind, can make an interesting low-scale crypto mine. The stuff everyone wants is stranded natural gas or hydro. From a commercial perspective, wind and solar are not that attractive because they can't sustain a baseload consistently enough to justify the setup and eating any electrical expense above 3 cents per kwh.”
In addition, Howard noted that ASIC technology may not meet Plouton’s expectations.
“The mining industry is challenged because of the difficulty rate,” he said. “ASICs can't keep up the efficiency gains we have seen in the past. Mining is a big balance sheet game. If you don't have tens of millions to put into the operation pre-profit, don't.”
Combining Solar Energy and Off-Peak Local Electricity
In response to Howard’s criticism, Sedigh said that Plouton is currently testing its new 7nm miners and is optimistic about the results.
“So far, we are comfortable with the prediction of a 5,000 miner capacity, with each miner using up to 1,950 watts and producing upwards of 70+ Th/s,” Sedigh said. “The current testing of the S17 is producing results in line with this prediction. This means our production pool is at minimum 350 Ph/s (350,000 Th/s) max 400 Ph/s.”
Plouton plans to use all of the energy produced during sunlight hours in combination with off-peak evening electricity produced by local utilities at reduced rates.
“Fortunately, we know that utility providers, including Southern California Edison, have excess capacity as early as 6 p.m., which they consider off-peak,” Sedigh explained. “The listed large-volume price for commercial users is 2.5 cents per KW/h.”
The expected cheap energy means that Plouton will be able to create a mining operation that is both sustainable in terms of the type of energy it uses and in its ability to withstand even bitcoin’s notorious price volatility.
“We get free peak-hour electricity for the next 25 years (panel warranty time) and dirt-cheap excess capacity from the utility providers,” Sedigh said. “This security will help us weather any bitcoin price volatility or long price-action winters like the one we had in 2018. Furthermore, it will ensure our survival by guaranteeing our average electricity cost to be what I believe is one of the lowest in the world at 1.5 cents KW/h for the next 25 years.”
Raising the Next Investment for Sustainable Bitcoin Mining
Plouton Mining’s fundraising goal is $35 million and it is hoping to attract enough investment to help fund the next stage of bitcoin mining’s evolution.
“The next round is going to be open to a handful of qualified U.S.-based investors, but mainly I think our majority of the raise will come from the international investors,” said Sedigh. “Our project gives the latter group unprecedented access to both California real estate ownership and Bitcoin infrastructure.”