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Layer1 Raises $50M from Peter Thiel and Others to Get into Bitcoin Mining
NEWS
October 15  |  2 min read

Layer1 Raises $50M from Peter Thiel and Other Investors to Build Bitcoin Mining Operation in Texas

The COIN360 Editorial Team

Layer1, a Digital Currency Group portfolio company, announced today that it has raised $50M from venture capitalists, including PayPal co-founder Peter Thiel, in a Series A funding round in order to build a vertically integrated bitcoin mining business in the U.S. The venture is valued at $200M.

The company launched in 2018 as an investment and infrastructure platform established as an activist fund aimed at building an ecosystem around privacy coin Grin, and is now looking to enter the bitcoin mining business, which is around 60% dominated by Chinese miners, largely thanks to the cheap access to electricity provided to miners by the government.

The San Francisco-based company plans to run its own power sub-stations and purchase solar and wind energy produced in Texas, which offers lighter regulation and cheaper power than other states in the U.S. Bitcoin mining consumes large amounts of electricity and usually takes place in colder environments to prevent equipment from overheating.

Alexander Liegl, co-founder of Layer1, stated that the new facilities for the company will consist of dozens of acres 150 miles west of Midland, Texas, and will operate under a new proprietary technology for cooling the chips used to mine bitcoin. Layer1 also partnered with a Beijing-based semiconductor company to create their own mining chips and infrastructure, in order to eventually own every step of the bitcoin mining supply chain, including financial services.

Liegl commented that operating expenses matter more now than “who can get the newest chip first” and that Texas has one of the most competitive electricity prices in the world. The Layer1 co-founder also stated that having a U.S representative in the business would “create more symmetric distribution in hash power”, and that from an ideological perspective could help bitcoin “grow into its multi-trillion potential”.