KokoYo, ChinaRainbow – Two young men, Brent Whitehead and Matt Lohstroh, decided to go into the business of bitcoin mining in an East Texas oil field while becoming second-year students at Texas A&m University in 2019. From the business, the 23-year-old, made 4 million US dollars or Rp57.8 billion last year. At the time, the idea of a oil and gas company joining a bitcoin miner was considered strange. However, Whitehead, who is a technician with a family background who works in oil and gas production, and Lohstroh, who is a finance student with an obsession with bitcoin, ignored that. They spent all the money earned from side work to build Giga Energy Solution, a company that prints bitcoins from stranded natural gas.
Giga placed shipping containers filled with thousands of bitcoin miners in oil wells, then diverted natural gas into generators, converting gas into electricity which was then used to power miners. This process reduces CO2-equivalent emissions by about 63 percent compared to sustainable combustion, according to research from Denver-based Crusoe Energy Systems. “This is a new way to not only reduce emissions but also monetize gas,” he said, quoted by CNBC, Monday (2/14/2022).
Whitehead said it had signed deals with more than 20 oil and gas companies, four of them public companies. Giga is also in talks with sovereign wealth funds, and they are growing rapidly. Giga’s 11-member team added six more employees this month. Lohstroh and Whitehead are the ones who are placing big bets on the potential of bitcoin mining to transform the energy industry economy.
“They generate their clients’ revenue through mining bitcoin with natural energy and solving environmental challenges with flare gas at the same time,” said Lee Bratcher, president of the Texas Blockchain Council. Giga executives also strongly believe in bitcoin’s power to create a new kind of financial freedom.
“Nobody controls it, and you don’t have to ask permission to use it. That’s what attracted me to bitcoin,” Lohstroh said. Giga’s founders say they distributed about 1,000 pamphlets to sell the idea of monetizing natural gas.
“A lot of people don’t know it. Most people laugh at us. Most people say, ‘This is the stupidest thing I’ve ever heard.’ Others said it was cool, but they didn’t think it would work, and then, there were some who said we needed to talk to the CEO of the company.”
When the Covid-19 pandemic came, despite the nationwide lockdown, Giga continued to do 35 mining at its launch site, but business development almost stalled. “Bitcoin is in a bear market. We had a lot of meetings trying to attract interest in bitcoin mining, and there was no interest at all,” he said. The team got creative by tracking down smaller customers in north and east Texas who broke the rules or couldn’t get a permit and simply wasted gasoline. As Whitehead explains, these small companies often ignore regulations. But the turning point Actually for the company occurred in December 2020, when the price of bitcoin reached 20,000 US dollars. That’s when some of the big players in the oil and gas industry began to take notice, and leaders of public companies began approaching them for the business. Giga pocketed turnover of more than 4 million US dollars in 2021. It is estimated that revenue later this year is more than $20 million. Whitehead said some of their mining sites have helped revitalize the local economy by creating jobs, such as field technicians and bitcoin pumpers. In the small communities where they set up bitcoin mines, it is sometimes the biggest source of income. “The area that was once just a ghost town has now found a way to take their wasted energy and monetize it, and that’s what excites me because that’s what helps the community as a whole,” Whitehead said.
Countless bitcoin miners say oil and gas will dominate the crypto mining industry in the coming decades. This is a good signal for Giga’s business model. But Lohstroh said the energy producer itself would become a bitcoin miner. “I think it’s the next big transition, whether it’s electricity producers, natural gas producers, upstream, middle, downstream. I think in all sectors in the industrial space, they will be affected by bitcoin mining because bitcoin mining is innately tied to power, and the core of energy is to create power. So I think you’re going to see a lot of semantics and how they’re related.” Editor: KokoYo