Bitcoin miner who almost died of cancer cherishes success
22:15, 29 October 2021
At times like this, Bill Spence turns into “a blubbering fool.”
Spence, the co-founder of upstart cryptocurrency developer Stronghold Mining, is explaining what the company’s success means to him.
“It means everything to me,” he said during a recent Zoom interview. “I am a miracle. I was given 48 hours to live at one point. So I feel like every day is a bonus day.”Spence was seemingly on his deathbed as kidney cancer ravaged inside him and left him much thinner. Spence’s gall bladder had shot sludge into his pancreas and blocked it. Doctors estimate that his pancreas lost about 70% of its function.
“I was on a feeding tube for a few months,” he recalled. “I lost about 45 pounds. I’m still pretty thin. I gained back about 20 pounds. While they were dealing with the pancreas, they found kidney cancer.”
Recovery from cancer took years
Following a recovery that took years and several surgeries, Spence started Stronghold with old friend Greg Beard. The two pals aim to use money earned from bitcoin mining and the sale of surplus electricity from coal-refuse power plants that electrify the digital-currency harvesting effort.
Stronghold conducts bitcoin mining, the process of creating new digital coins by solving a highly complex computational math puzzle with the aid of super-fast computers, according to Investopedia. The mining process is needed to maintain the ledger of transactions upon which bitcoin is based. The term bitcoin refers interchangeably to a cryptocurrency known as Bitcoin and other digital currencies often referred to as bitcoin.
On 20 October, Stronghold struck gold as it became the first bitcoin miner to go public. The share price skyrocketed 65% on Nasdaq from its opening price of $19. The stock has remained well above that mark, closing up 2.23% Friday 29 October at $27.46 and inching higher in after-hours trading.
Stronghold bills itself as an environmental-reclamation company first and a bitcoin miner second.
Spence, a Pennsylvania native, believes that his kidney cancer and his father’s battle with the same disease are tied to toxins present in water and soil resulting from the oxidisation of former coal mining plants’s carbon-dioxide emissions. The state has suffered extensive environmental damage tied to centuries of former coal mining operations.
“I grew up on one of those (damaged dirt) piles,” said Spence. “I used to play baseball on one when I was a kid.”
Power plants help replenish soil
In the mid-1990s, Pennsylvania developed electrical co-generation facilities powered by coal refuse extracted from damaged soil. Before he became a bitcoin miner, Spence was the independent owner-operator of one such facility near the Scrubgrass coal-refuse plant where Stronghold produces electricity and mines digital currency.
“(The co-generation) plants were designed specifically to burn this kind of material,” Spence said. “(Operators) put limestone in the boiler and the limestone then results in an ash that is a beneficial ash that can be utilised and put back in place and it neutralises the soil because you create a PH balance between the acidic soil that was mixed in with this waste and the limestone, which is basic. So you get a PH-neutral soil that can be revegetated and then people can move in there.
Repurposing communities
“We like to say, we don't just repurpose these sites. We repurpose these communities where you're able to build homes. Hopefully, we attract people.”
Stronghold sells electricity to the Pennsylvania power grid. The company is committed to providing excess electricity to the grid during extreme weather conditions to offset power outages – even if that means shutting down bitcoin mining operations temporarily.
“We feel that's one of the advantages that bitcoin offers in this situation, grid stability,” said Spence. “There's been a lot of discussion around bitcoin and its negative impact on grids in the electrical system, but we feel the way we're doing it and the way it's utilised in Pennsylvania that it actually enhances the grid so that that availability in peak situations is there.”
As a result, said Spence, Stronghold can help Pennsylvania avoid rolling blackouts that have occurred in Texas and other regions.”
While attempting to repurpose communities and power plants, Stronghold is also attempting to revamp bitcoin mining, which has come under criticism for its high costs, electrical usage, and environmental footprint due to the requirement for large data centres.
Developing new facilities
Stronghold has bitcoin mining operations at the Scrubgrass plant in Kennerdell, Pennsylvania and is in the process of developing two more power facilities.
Spence and Beard believe that their strategy of tying bitcoin mining to electrical generation gives them an advantage over competitors.
“Ironically, buying the power assets is probably the easy part for us,” Beard said. “Most bitcoin mining companies are not vertically integrated.
“We're the first one of real scale to do it. And that's really because the industry did not come out of the power industry where, obviously, (Spence) and I did,” said Beard, who has developed a number of other power plants.
Beard said it costs Stronghold $3,000 to make each digital coin – less than half the expense incurred by rival miners.
Power costs
“Vertical integration, we think, is the future of this business, and having a low cost of power is essential, because the biggest share of the costs of mining bitcoin is power,” said Beard.
Stronghold aims to achieve an eight exa-hash run rate by year-end 2022. An exa-hash rate refers to the ultra-high speeds of computers mining bitcoin.
According to Encryptionary.com, one exa hash per second equals one quintillion hashes per second. Beard said Stronghold will account for 1.5% of the global hash rate if it were not to change this year or next year.
“And, there are things happening in the market that are slowing the growth rate of the overall overall global capacity,” Beard said. “The slowdown is related to the chip shortage and difficulty in developing power assets into data centres.”
To achieve its eight-exa-hash goal by 2022, Stronghold will require a fourth power plant capable of generating 150 megawatts.
“Owning power assets is an important part of our strategy and we want to stay Pennsylvania-focused if we can, but maintaining our growth rate is more important than the location of our power assets,” he said. “If we can't acquire assets there at a competitive price with a low variable cost, we will succeed elsewhere. But our first choice is to stay home.”
It’s safe to say that would mean a lot to Spence.
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