Layer 1, a San Francisco based Digital Currency Group (DCG)-backed investment fund is taking its first step into the Bitcoin mining business. Interestingly, the pool of investors includes venture capitalist and co-founder of Paypal Peter Thiel, who has committed $50 million to the venture. The venture is deemed to be worth $200 Million.
Series A Funds by Layer 1
The venture announced that it has raised the first multi-million dollar Series A from Peter Thiel, Shasta Ventures and crypto industry leaders. Interestingly, this is not the first venture Theil has invested in. Back in May, he invested in Tagomi Systems Inc . The latter is a startup that aims to serve as a broker-dealer with a mission to serve as a broker-dealer to optimize bulk bitcoin trading orders for high-value clients. In September, a crypto investment fund backed by Peter Thiel, Confirmation1, had raised $45 MM.
Layer1 co-founder Alexander Liegl said that,
“Originally established as an activist fund aimed at building an ecosystem around privacy coin, Grin, the firm is now building out a bitcoin mining operation and claims to be the first bitcoin mining company in the U.S. “at scale.”
He further added,
“We expect our chips to be competitive for at least eight years now…you want to have your own chips in hand. We also have our own electricity substations: effectively that’s as close you can get to owning your own power plant,”
Layer 1 Develops Special Cooling Technology
For the same purpose, the company has bought a dozen acres of land in Texas to create its own electricity substations. The firm’s ultimate aim is to streamline every step of the Bitcoin mining supply chain and subsequently vertically integrate the mining business. Furthermore, the firm may expand into lending and derivatives and other Bitcoin-based products.
In order to take advantage of low electricity places in Texas, the firm has developed a special cooling technology that creates additional power draw of 3% of the mining power machines consume. While the firm seeks to settle its ground in Texas, the mining scenario in the United States has faced opposition from local communities. The interesting case of Bitcoin is one such example. The latter had once created the largest mining facility in Texas which resulted in the creation of over 350 jobs. However, they ended up hiring a mere 15 employees during the bearish crypto period earlier this year.
Interestingly, this case doesn’t seem to perturb Liegl who believes that running a mining farm in the U.S. has both economic and ideological significance.
“I feel very strongly about this, which is you need a U.S. representative in order to create more symmetric distribution in hash power, that would definitely be a net positive for the community and the protocol.”
Will Layer 1 manage to attract more investors and be beneficial for Texas residents? Let us know in the comments below!