Public scrutiny over Bitcoin mining's energy mix hit a high point during 2021. But many Bitcoin miners are not backing down, claiming Bitcoin's energy usage is not only misunderstood, but the pros of sound money far outweigh its costs.
In this episode of Compass Live, Cathedra CEO AJ Scalia and President and COO Drew Armstrong explain how Bitcoin mining is a foundation for humanitarian growth, and how Cathedra Bitcoin is extending that vision into reality.
Other ways to watch and read about this conversation:
- AJ Scalia, CEO of Cathedra Bitcoin: Scalia was formerly a member of the Galaxy Digital research and investment team, specializing in Bitcoin mining. He also worked at JP Morgan as a technology investor.
- Drew Armstrong, President and COO of Cathedra Bitcoin: Armstrong was formerly a member of the Galaxy Digital research and investment team, specializing in Bitcoin mining. He also worked at Barclays as an investment banking analyst.
Lets dive into the rebrand of Fortress – Cathedra – it seems to be about building a long-term structured plan for bitcoin. Can you share more on that?
- AJ: Bitcoin has this monetary cathedral-esque way about it. Its the ultimate embodiment of low time preference and long-term thinking. That is the spirit we want ot brig to the company.
- Drew: Similarly, when you think about bitcoin, it is a multi generational project that we are all working toward, adding whatever value we can to improve the network to further human flourishing. We want to build a category defining company in bitcoin mining at the intersection of bitcoin and energy. We want to celebrate the beauty we see in bitcoin and mining.
Is Cathedra in favor of using renewable energy at all, or perhaps in some applicable cases?
- Drew: We think it is important to have a diverse energy strategy. We use hydro and flared gas. I am a huge nuclear bull. I recently joined a protest against the closure of one Diablo Canyon - a nuclear plant in California - a provider of 1/10th of California’s electricity. Bitcoin mining can also help renewable grids curb curtailment.
- AJ: We are not fully going into the implications of renewable energy sources. Different energy sources have different trade-offs.
How do you convince people who are interested in the ESG narrative that your thesis is correct?
- AJ: We are trying to paint a more optimistic picture for the future that can unite everyone. Whether or not you agree with climate change, we just need to create cheap and abundant energy. Bitcoin mining has a role there.
- Drew: We strive to deliver intellectual honesty. We truly do believe bitcoin is good for the world. Energy is important for human life - regardless of your background. Energy is going to be really important to bring billions of people out of poverty.
Have you thought about bitcoin miners investing in some of these larger energy infrastructure projects and how does that look in 5-10 years?
- Drew: There is so much potential if we embrace nuclear power, especially through bitcoin mining. Navigating nuclear energy creation can be tough because it's highly regulated and cost-intensive. We are still in the early innings on bitcoin mining saturating the energy sector.
- AJ: From an investor's standpoint, it is tremendously helpful to have a buyer of last resort. You will see more investment in energy because it's now a less risky proposition with the presence of bitcoin miners that can monetize any energy that would have been wasted before.
Where is bitcoin mining going in 2022?
- AJ: there are 15-20 publicly traded bitcoin mining companies now. There needs to be some sort of adjustments on the valuation front.
- Drew: A lot of energy producers have not pushed the intersection of bitcoin mining and energy markets. Cathedra has expectations for this to change in the next couple of years.
What were some of the lessons you learned from the China ban?
- Drew: We think a diversification is really important. We really want to have a fleet that is diversified and resilient so that we can keep hashing no matter what happens.
- AJ: Theres a certain class of risks that are overlooked in the market. We don't want to be concentrated in any particular area that would jeopardize our business.