Returning to the Atoms

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“We’re dealing with synthetic commodities, and NFTs, which have financial value, but are completely ethereal. So it’s nice to return to the atoms.”

Nic Carter

One of my favorite things about working in bitcoin mining is returning to the atoms. 

There’s a very physical aspect to building a bitcoin mine. We work with utilities and contractors to install power lines, fiber optic lines, pour concrete and asphalt, and erect metal structures. What gets built can last for the next 10-20 years. One of the sadder things about living in a software-dominated world is much of this goes under-appreciated. For all the digital infrastructure we rely on, there is just as much physical infrastructure behind the scenes. There is a zen-like balance to this. It’s as if we have one foot in the digital, and one foot in the physical. 

Web3 is being built on visions of digital art, digital land, digital money. What happens when we have both feet in the digital? While I don’t have the answer, there is a strong part of me that wants to stay in the physical. I like to think that other bitcoin miners feel the same way. I’m not sure about everybody else. 

A few weeks ago, I joined an alumni panel at the request of a former professor to speak to undergraduate business students. It was a Q&A in which a dozen alums, including myself, provided an opportunity to answer student questions and give career advice. After introductions, the first hand shot up. 

“This question is for the people working in Bitcoin… and media, too I guess. Would you consider Web3 a good career choice right now, or should I start my career in Web2?” 

I replied saying bitcoin mining is very different from Web3. I got a head nod, and awkwardly realized I did not answer her question. I added that it’s probably good to get in on the movement early, a lot of talent is going into the space, and you can always pivot back to Web2. I got another head nod, then a student asked how to break into freelancing.  

No one asked me about working in Bitcoin. 

Part of me gets it. Very little changes with Bitcoin. Innovative projects on the platform are rare. On the other hand, many people are leaving their Web2 jobs to work in Web3. There is a broad spectrum of exciting opportunities within Web3 such as NFTs, DAOs, DeFi, and the metaverse. The money is flowing, too. Andreessen Horowitz’s crypto venture arm, A16z, recently announced its fourth and largest investment fund dedicated solely to Web3 companies—a total of $4.5 billion.  

Still, the shift towards Web3 hasn’t mattered much for Bitcoin’s network growth, a healthy sign that Bitcoin is here to stay. According to data from BTC.com, total hash rate—a measure of bitcoin miners’ computational frequency—has grown nearly 52% in the past year to 216.54 EH/s. Latest estimates from the CBECI show that the U.S. is now the leading country in hash rate with a nearly 38% market share, compared to only 11% the year prior. 

Much of that shift has been driven by China banning bitcoin mining in June 2021, and Chinese miners then immigrating to the U.S.—like Kevin Pan, CEO of bitcoin mining company Poolin. Poolin has operations near Pecos, a town of approximately 13,000 people in Reeves County, Texas. 

“We built so fast. We built a big base. Solid base for the company. … When people found the oil under this land, people came in. They built the towns. They built the cities. We bring new industry here,” Pan said  in a YouTube video promoting the launch of their Pecos site in April 2022. The video, which opens with a red, white, and blue “Bitcoin = Freedom” tagline, feels like a marketing campaign for the Lone Star state. A guy is riding a mechanical bull, a band is playing on the back of a pickup truck, and people are eating BBQ while Pan walks around in a cowboy hat. 

There’s a reason Chinese miners like Pan decided to come to the U.S. Cheap electricity tends to follow excess supply over demand, and rural America has a lot of cheap electricity. In Texas, there’s a lot of wind and solar energy where there’s not enough people to use it. In other parts of the U.S., like North Carolina or Upstate New York, abandoned factories situated near hydroelectric dams have provided miners with stranded assets waiting to be used again. The developments that follow are often an exciting new project for local contractors, especially electricians. When New York tried passing a statewide moratorium to ban cryptocurrency mining last year, the International Brotherhood of Electrical Workers (IBEW) was the loudest voice of opposition. The bill ultimately failed to pass.1 

The IBEW opposed the moratorium because Bitcoin keeps building, and that’s good for business—especially for local trades workers. These are people that are constantly “returning to the atoms”, and are integral to their local communities. The more we digitize our communities, the less included they feel in the world of tomorrow. You can’t hire a welder in the metaverse. 

If there are any Bitcoiners out there with similar feelings over this Web3 craze, I have one message: Keep building. We are still living in the atoms.

Footnotes

[1] New York’s legislature recently passed a new statewide moratorium on bitcoin mining—focused primarily on carbon-emitting power plants—which has also faced opposition from the IBEW. The bill is slated to be sent to the Governor to sign or veto. 

Thank you to Sam and JUDE KLINGER for contributing to this article.