The Silicon Review
The pandemic has wreaked havoc in the financial world, and the governments around the globe have had to print currencies to tackle the crisis, leading to widespread inflation. But there have also been major gainers during the pandemic as digital transformation has received a significant push. One of the primary beneficiaries of the inflation and digital transformation is Bitcoin, which has attracted great curiosity and investment.
We wanted to gain some insight into how and why Bitcoin has risen in this time of crisis. So, we turned to Jaime Leverton, CEO of Hut 8 Mining Corp, for answers. In a brief interview with us, she allayed our fears about all things Bitcoin and explained why it could be counted as lasting assets. Read on for the excerpts from the interview.
Q. Tell us about Hut 8 Mining Corp.’s services in brief.
Hut 8 is a bitcoin mining company with industrial scale operations in Canada. We provide value for investors through low production costs and appreciation of its bitcoin inventory. Hut 8 investors have direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. They can avoid the need to create online wallets, wire money offshore, and safely store their bitcoin.
Q. How has the financial crisis and COVID-19 affected the growth of cryptocurrency mining?
COVID-19 has undoubtedly had an effect on cryptocurrency. It had both an interesting and positive impact on bitcoin, i.e., if anything related to the pandemic can be conceived of as positive. Governments around the world have printed a third of their national debt in fiat. The pandemic has sparked a money printing “Mardi Gras” and the result of that will be a highly inflationary environment. Investors are foreseeing this and are looking for a way to hedge against inflation and protect the value of their portfolios.
On the flip side, what goes up in value in an inflationary environment are scarcity assets like gold and now, Bitcoin. The advantage of Bitcoin over gold is that it’s immutable and decentralized. It cannot be faked or diluted, and the fear of loss is eliminated - it’s the hardest store of value in history.
COVID-19 has also created an interesting confluence of inflation coupled with the acceleration of the digitization trend. This has supported bitcoin adoption and therefore bitcoin mining, because it has pushed people towards comfort with digital forms of money and encouraged a familiarization with what bitcoin means, and is.
Q. Cryptocurrencies can be volatile currencies. This means that their exchange rate can move extremely quickly. In such cases, do you protect the interest of the users?
Yes, there is still volatility in cryptocurrency, but that volatility is maturing. At Hut 8 we’re hodlers – we hold bitcoin on our balance sheet, and we leverage this significant balance to gain a fiat-based revenue stream through the use of a Bitcoin yield account. This fiat-based revenue stream helps offset some of our fiat-based operational expenses, which in turn allows us to hold more of the Bitcoin we mine on our balance sheet.
Q. What are some of the lesser-known variables impacting cryptocurrency mining and how do you manage them for Hut 8?
One of the mining variables that is not considered very often is the weather and how that impacts energy. Mining relies on computers, and heat impacts the performance of the hardware. The simple solution is to set up operations in a colder climate. That being said, financial costs, regional taxes, government sentiment, and local power sources need to be a part of that decision. We are fortunate to have Hut 8 mining operations in Alberta, a favorable location where we have strong government relationships, cold weather, and can use a mix of natural gas and wind. This has been a key element in setting us up for success and ensuring that our hash-rate isn’t negatively impacted by our geography.
Q. Most of the investors want to pool in their capital in safe and secure investments. The major problem with cryptocurrency is its – uncertainty. What are the measures taken by you to secure your offerings?
We believe in bitcoin and only bitcoin. And we hodl ours because we do not see it as uncertainty. Bitcoin is the bellwether to all the other Wcurrencies, and it’s the blue-chip of all the cryptocurrencies. We have seen major institutions adding big balances of BTC. Financial investment and payment services like PayPal, Ruffer, and Blackrock are offering it. This increasingly strong institutional demand also helps to dampen the volatility and downside risk of the asset class and supports the increasing feasibility of bitcoin as a hedge against a depreciating dollar, or any depreciating currency. This is a use case that supports our confidence in the lasting value of bitcoin assets.
Q. What can we expect from Hut 8 in the coming time?
In short, we’ll keep calm and hold on. We are focused on looking for opportunities, to strategically expand our operations, to continue to build strength on our balance sheet, and to broaden our ESG initiatives with an increased focus on clean energy and building even further on the diversity of our team.
The Tech Visionary
Jaime Leverton, CEO
Jaime is a transformational leader with a proven track record for accelerating growth. She has served as the driving force behind the operational re-imagining of some of Canada’s most important technology companies. Throughout her career spanning more than 20 years, Jaime has served in a series of increasingly senior executive roles with eStruxture Data Centers, Cogeco Peer 1, National Bank, BlackBerry, Bell Canada, and IBM Canada. Jaime has a Master’s of Business Administration, Marketing Informatics from Dalhousie University and a Bachelor of Arts, Psychology and Political Science from the University of Ottawa. Jaime sits on the board of the Stratford Festival and the Merry-Go-Round Children’s Foundation.