Bitcoin's Coming AI Problem: https://patchcointalk.org/t/bitcoin-s-coming-ai-problem/183We were reminded by a post in our
Patchcoin Discord channel about a major deal this week between a large Bitcoin miner and a Google-backed AI infrastructure company.
Story: ”Bitcoin miner Cipher signs $3 billion Google-backed AI hosting deal over ten years””Cipher Mining, the fourth-largest public bitcoin miner by market cap, unveiled a two-pronged strategic financing and expansion move on Thursday centered on its growing high-performance computing ambitions.
The company said it has signed a 10-year colocation deal with AI cloud infrastructure firm Fluidstack and simultaneously proposed a private offering of $800 million in convertible senior notes maturing in 2031.
Under the Fluidstack agreement, Cipher will provide 168 MW of critical IT load capacity, supported by its 244 MW gross capacity at its Barber Lake development in Colorado City, Texas. The contract carries an estimated value of approximately $3 billion over its initial term, with options for two five-year renewals that could raise the total to about $7 billion.
Why is this important?
We have seen projections that over 20% of Bitcoin miner power capacity will shift to AI and high-performance computing by the end of 2027. Bitcoin miners typically have significant investments in sites with power availability, grid connections, cooling, real estate, and infrastructure to host high-density computing loads.
Given the long lead times for capital projects, the required energy capacity to service AI will not come online in time. Companies that are heavily invested in Bitcoin mining, such as Cipher, now have increasingly strong incentives to diversify into other compute-intensive sectors like AI.
Diversifying into AI / HPC provides optionality for these large miners. Investors tend to reward companies with multiple revenue streams, especially when they can pivot to emerging industries that don’t carry the same regulatory risk as Bitcoin mining does.
Bitcoin will become more centralized as a result. Fewer miners will control larger shares of the Bitcoin network. This is all but guaranteed from the trends we’re seeing this year.
Also in the past month we have noticed more analyst coverage of the troubling externalities of Bitcoin mining. It is encouraging to see the world waking up.
We predict this focus on Bitcoin’s energy waste will intensify into 2026-27. By the time of the next Bitcoin halving in 2028, it’s likely that the Bitcoin mining industry will have far fewer market participants.
We already know…Bitcoin mining is
bad for the health of communities, and in some countries
the public health data is being hidden.
Bitcoin mining is
causing energy shortages.
Bitcoin mining has
dire implications for climate change.
Bitcoin mining may be
the single largest waste of energy on Earth.
Bitcoin has the carbon footprint of Qatar, the power consumption of Poland, the electronic waste of the Netherlands, and the fresh water consumption of Switzerland.
If Bitcoin were a country, it would be #24 in the world for energy usage, between Poland and Thailand.
Our
Patchcoin network uses about two million times less energy than Bitcoin, for the same 21 million coins. It is a superior design for cryptoasset sustainability.
Proof-of-stake is approaching its tipping point moment. Thank you to every one who operates a node and supports our decentralization, as we build a trusted history together.
About Patchcoin:Patchcoin (PTC) is a Bitcoin alternative using proof-of-stake technology. It is a fixed-supply cryptocurrency with 21 million coins.
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