How are you all? I hope you are all well and healthy.
We have been hearing for the past decade that Bitcoin mining consumes a lot of electricity, it is damaging the environment, etc. But the interesting thing is, this very “electricity-consuming” infrastructure is now becoming the lifeline of Artificial Intelligence, or AI.
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As I was reading the article, one thing became very clear—the biggest crisis in the world today or in the next 2-1 years is going to be “electricity” or “energy”.NVIDIA CEO Jensen Huang also said the same thing. Now the problem is, you can’t just build a power plant or data center in a hurry. It takes 3 to 6 years to build a new AI data center. But AI companies (like Google, Microsoft, OpenAI) need to get their power now, by tomorrow.
Over the past 10 years, miners have built massive power plants, cooling systems, and substations around the world. Their ready-made infrastructure is now a gold mine for AI companies. While others spend years getting their electricity connections, Bitcoin miners are getting their setups ready for AI in six months.
CoreWeave’s story struck me as cinematic. They started out mining Ethereum. Imagine, they started out with a graphics card on a pool table in an office in New York. When the crypto market crashed in 2018, they didn’t go bankrupt and started renting out their GPUs for other purposes. Today? Today, they are a $65 billion company! They left crypto and are now AI cloud giants. It seems to them that crypto was a “training ground” for them.
Similarly, Crusoe Energy has also given up mining and is now building infrastructure for giants like OpenAI. They have realized that owning a mine (renting infrastructure) is more profitable than digging a mine and extracting coins.
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Most companies have now taken a middle ground. Such as Hut 8 or Cipher Mining. They see that the profit margin of Bitcoin mining is very uncertain (sometimes increases, sometimes decreases). But if you rent space or provide power to an AI company, you get a guaranteed income for 10-15 years, and the margin is also 80-90%!
So are they giving up mining? No. They are balancing. When the AI load is low, or there is excess electricity in the grid, they mine Bitcoin. Bitfarms has said thatity will completely leave mining and move to AI infrastructure by 2027. That is, they understand that money is no longer in coins, but in power supplies.
Not everyone is leaning towards AI. Some companies like Canaan still believe in pure mining. But I find their approach very innovative. They are using the heat generated from mining machines to heat tomato greenhouses in Canada! And in Europe, they are making miners that will work as house heaters.
The market may not be pricing them right now (stock prices have fallen), but some big investors are betting on them. Because at the end of the day, energy or power resources are the real wealth.
After looking at everything, I realized that Bitcoin mining was not a "waste". Unknowingly, this industry has laid the foundation for the AI revolution. The miners we once called power-guzzlers are now coming forward to power the ChatGPTs and big AI models we use today.
The ones that survive in 2026 or beyond may no longer be known as "crypto companies" but as "energy and infrastructure" giants. Fortune favors the brave, and those who can adapt to the times will ultimately reign supreme.
Posted Using INLEO