Under the agreement, Fortress will invest $15 million in mining equipment through Great American Mining in the hopes of capturing 180 peta hashes a second (PH/s) in four months (Fortress currently produces roughly 20 PH/s).
“I believe the future of bitcoin mining will need to be environmentally conscious, seeking out stranded energy sources and repurposing waste and emitted gases to productively secure the Bitcoin blockchain, and that both investors as well as the bitcoin mining community will place a premium on companies who pursue this kind of forward-thinking activity,” Fortress Chairman Roy Sebag said in a press release.
"Our board felt that Great American Mining had the best operational team, and a practical solution in place, which lined up with our own vision for the future of Bitcoin mining," Fortress CEO Aydin Kilic told CoinDesk.
In search of a 'green' bitcoin
Discussion over bitcoin’s energy consumption has resurfaced during the current market cycle, with some saying new U.S. institutional investors will want “green” bitcoin that isn’t mined in sanctioned countries or China.
Still, those worried about the energy that bitcoin consumes don’t always consider that 35%-76% of bitcoin energy appetite is fed by renewables, and almost all of these power sources lie outside major population centers where the power is “stranded” and couldn’t otherwise be used.
Great American Mining supplies oil and gas producers with mining rigs that convert otherwise flared or vented natural gas into hashpower.
If all the stranded gas in the U.S. were used for mining, then “all of the vented/flared gas in the U.S. converted to electrical power would yield approximately 7.4 GW (gigawatts), which in turn represents about 50-70% of the total power converted by the Bitcoin network currently,” the press release states.
The venture comes at a time when bitcoin miners (especially in the U.S.) are receiving new shipments of hardware to rev up their hashrates. Marathon Patent Group, for example, plans to roll out more than 100,000 ASICs (application specific integrated circuits) by February 2022.
The surge in mining activity has made bitcoin mining more challenging than ever after the latest difficulty adjustment.
Updated Tuesday, April 6, 2021, 16:12 UTC: Additional comments from Fortress CEO Aydin Kilic and a change that corrects a misattributed quote.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.