Layer1 mining company earns 700% profit from reselling electricity

The American mining company Layer1 resold electricity at a markup eight times the purchase price. Bloomberg reports on the interaction between a major user and the grid.

The publication noted that in summer, when temperatures rise to 37°C, the company is forced to halt Bitcoin mining. Nighttime electricity prices fall due to oversupply, allowing Layer1 to run its mining equipment at full capacity.

The ‘demand response’ contract with a Texas electricity provider allows Layer1 to sell contracted electricity to the grid for a profit. As a result, when electricity prices in the state exceeded $200 per MWh, the company achieved returns of over 700%.

Source: Bloomberg.

By spring, Layer1 plans to install 50 mining devices, which will consume up to 100 MW of electricity and, under current conditions, produce around 27 bitcoins per day.

Layer1, backed by Peter Thiel, pledged to shut down mining equipment on notice during peak-load periods, freeing up 100 MW of capacity for the grid.

In August, Lancium accused Layer1 of patent infringement for adopting a model for regulating electricity demand.

More recently, Layer1 was accused of deceiving investors. The discrepancies concern the amount of funds raised and the makeup of the founders’ team.

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