National Defense Through Bitcoin Mining

By Mike Hobart

My fellow Americans, 

Our great nation is going through a… maturing, of sorts. We are currently combatting multiple problems of paramount import and proportion all at one time. We have the amalgamation of public health crises in dealing with a population that is swept with chronic metabolic diseases and costs of healthcare that are through the roof. We are witnessing a flood of consolidation in the banking sector amidst fears of contagion. And then there’s the energy crisis that seemingly everyone has seemingly forgotten about…

Remember the concerns over the capability to produce enough energy? Europe got a mild winter, so we got out Scott-free, right? Or the attacks on grid infrastructure before the 2022 holidays along the Eastern Seaboard? Do you remember? I remember. You know how we defend against it, this weakening of capabilities to provide grid power?

The solution, as I see it, currently available to us is two-pronged:

1. We begin building out projects of high energy density – post-haste. This means more oil, more natural gas, and more nuclear power. We need the oil to produce the nuclear projects, as well as to produce the materials that are necessary for upgrading and maintaining the generation & distribution infrastructure across the US (which is being upheld to very poor standards according to the American Society of Civil Engineers).
   
   This prong takes large amounts of time as there are many hurdles of bureaucratic red tape, and regulations, and safety standards that go along with all of the aforementioned steps. Not to mention the planning of project sites, and the filling of positions and jobs to progress these projects towards fruition. On top of the geopolitical reshuffling of global manufacturing and labor (like the chip foundries that are coming to the United States). There are a lot of large pieces moving on this game board, and those pieces take much time and much care to ensure that they land as necessary.
   

2. This one is the more rapidly deployable prong. We utilize bitcoin miners to spool up current energy-generating infrastructure. We take sites that are producing, or capable of producing, and are not operating at max capacity (which is the vast majority), and we plug bitcoin miners in. These bitcoin miners give an economic incentive and justification for these operations to be readily producing energy at a consistent & predictable clip, for as constant a duration as possible. These sites are enabled to produce income during the non-peak demand hours of day-to-day operation, maximizing their returns. This also keeps the equipment and operations in more healthily operating order. If you’ve never worked in mechanical fields before, when the equipment that gets used less, or very little, is equipment that corrodes, rusts, and weakens. Meaning that it improves the longevity and health of the infrastructure and projects operating, in general. This also produces more job opportunities as maintaining the equipment, and grounds, as well as monitoring safety standards, will need to be more readily performed.
   
   Now, the other portion of this prong of the strategy is even more diabolically clever (if I do say so myself). This strategy gives these projects economic incentive to push their Operational Readiness (OR Rate) closer to 90-100% with bitcoin miners (that can shut off in as short an amount of time as 60 seconds, according to the Foreman Mining CEO Dan Foreman). This boosts the resiliency of the grid. Due to the fact that bitcoin miners can cut-off their demand at, virtually, a moment’s notice without risking damage to equipment, with very little cost to the energy producers or the miners. This allows a diversion of the flow of those electrons to go from the miners towards the rest of the grid as necessity demands. A lot like how the tracks of a railroad can be switched rather readily to facilitate redirection.
   
   What I’m getting at is building up what I am calling a “Rolling Reserve of Power.” Thanks to the bitcoin miners, we could have a national or regional power production OR Rate of closer to 90-95% on a consistent basis of utilization capacity (which sits at just shy of 80% according to Moody’s). Versus now where production fluctuates between the peak demand hours.
   
   Now, it’s also worth noting that there is a legitimate reason why infrastructure capacity is limited to 80% utilization (or 20% beyond what is deemed as “full capacity” — to-may-to, to-mah-to). That cushion of capacity is intended to be capable of responding to extreme circumstances. The benefit of my proposed strategy is that bitcoin miners’ utilization of capacity does not take away from the demand response in emergency situations, as expressed in Texas.
   
   In this strategy the bitcoin miners act like the wall of a dam; holding back the flood of power from the grid and allowing it to be loosed upon the grid when it is strategically viable or tactically necessary. This could, in theory, prevent the development of rolling blackouts if more failings by the infrastructure occur in the near-term. Which seems likely. This also allows for a synthetic expansion of power generation while we work to build out the modern solutions mentioned in Prong 1. Another way of thinking about this strategy is my analogy of a mini-gun that I shared with the Swan crew in their Cafe Bitcoin morning show on the morning of May 10th. The reason I used a mini-gun as an example is because in order to fire a mini-gun it is required to get the revolving barrel engaged before firing. This Rolling Reserve of Power allows for the metaphorical barrel to be spinning consistently, 24/7, and ready to be fired (deploying energy to the grid) at a moment’s notice.

Companies like Standard Power are working to provide sites for bitcoin miners (called “colocation facilities”) that would be the linchpin of this strategy. For example, Standard Power’s site in Conesville, Ohio is something of serious capacity, that their team has been gracious enough to share insight with me. The former home of one of the country’s largest coal-fired power plants (which is now decommissioned and in the process of being demolished), provides ample advantages to bitcoin miners that are looking for access to large scale power for a cost basis.

Standard Power has access to a massive 1.2GW of capacity via access to substations of 138kv (Phase I 435MW) and 345kv (Phase II 800MW) tie-ins. This site is also home to one of the largest interconnection sites in the country. Oh, and did I mention that the team over at Standard Power includes access to nuclear power as part of the sourcing with their interconnection site? As an example of just how absolutely massive this operation is their Conesville site has the capability to facilitate deployment of upwards of nearly 1,200 Bitmain HK3’s.

It’s the projects like the Standard Power’s that will facilitate this strategy of defending US power infrastructure. As well as revitalizing portions of rural America that have since fallen into dilapidation. As many of these smaller towns have since gone forgotten. Falling into the shadow of innovation as the march of technology has raged on. 

With bitcoin mining, America can flourish. In wealth in energy, wealth in jobs, wealth in energy security, and of course wealth in bitcoin.

If you, or an individual you know, are interested in an opportunity like the one with Standard Power and would like to reach out to them you can contact them directly or shoot me a DM on twitter or email me at: {mike.hobart.me@gmail.com}.

Make sure to tell them that Mike sent ya ;)