On a sweltering summer afternoon in West Texas, a cryptocurrency miner backed by billionaire Peter Thiel powered down its data-processing centers for about 30 minutes. During that short window, the company made money not from Bitcoin, but from selling electricity.
On hot days without wind, the company, Layer1, can sell its contracted power supplies back into the grid for a profit. Recently, when power prices in Texas topped $200 a megawatt-hour, Layer1 reaped returns of more than 700%, according to its founder and chief executive officer, Alexander Liegl. At night, as power prices drop to zero or lower due to the oversupply of wind energy, it can throttle up operations as much as the circuit boards can handle.
When that happens, “we’re getting paid to produce Bitcoins,” Liegl said.The strategy is part of a trend that’s revolutionizing how big electricity users interact with the grid.
