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Iris Energy: Powering the Future with High-Performance Computing
A midst a backdrop of central bank money printing, bitcoin is hitting the mainstream. It is increasingly gaining support of large financial institutions, including the likes of JP Morgan, State Street and Fidelity.
Bitcoin’s appeal as a scarce monetary asset stems from the fact that only 21 million bitcoins will ever exist; the security and verification of which is backed by the ingenious proof-of-work mining process. Back in 2009 when bitcoin first appeared, one could profitably mine it on a laptop with a reasonably capable central processing unit (CPU). Subsequently, as bitcoin mining competition increased thanks to further adoption of the network and bitcoin price growth, miners swapped their laptops out for top-of-the-line desktops with powerful CPUs and graphics processing units (GPUs). Then, in 2013, China changed the way bitcoin miners would go about their business by developing application-specific integrated circuits (ASIC) dedicated solely to solving the SHA-256 algorithm used to maintain security and validate transactions in the bitcoin network. As a result, integrated circuit (IC) manufacturers started to gain competitive advantage in bitcoin mining due to their access to the latest ASIC technology.
However, Daniel Roberts and Will Roberts, veterans in the realms of finance, digital assets and energy infrastructure, foresaw a change in the future of bitcoin mining. The duo recognized that the computing advantage held by IC manufacturers had a limited life as these chips would ultimately be commoditized in a similar fashion to other industries such as personal computing, LCD TVs, solar panels, etc. As such, comparative strength in mining would begin to shift in favor of firms specializing in large-scale energy and data center infrastructure with access to institutional capital markets. Based on this observation, the Roberts brothers established Iris Energy and mobilized an all-star team of energy and finance experts, with a vision to capitalize not just on the highly profitable and resilient bitcoin mining business but to also then leverage that same infrastructure and platform into the advent of an exponential growth in demand for energy-intensive high-performance computing (HPC).
Currently, Iris Energy owns a substantial holding of land, electrical connection capacity, data center infrastructure and access to renewable power with a number of nearterm growth opportunities in their sights. “Bitcoin mining is paving the way for the future of lowcost HPC. Rather than locating in expensive capital city locations, Iris Energy’s data centers are optimizing both capex and opex by locating in regions with an abundance of surplus renewable energy, electrical infrastructure and fiber networking” says Daniel Roberts, Executive Chairman.
Bitcoin mining is paving the way for the future of low-cost HPC. Rather than locating in expensive capital city locations, Iris Energy’s data centers are optimizing both capex and opex by locating in regions with an abundance of surplus renewable energy, electrical infrastructure and fiber networking
This way, the company substantially reduces its cost base with respect to power and facilities as, unlike many traditional data center and information & communication networks, bitcoin and HPC does not necessarily require extensive redundancy and ultra-low latency. “With capital from institutional partners and substantial daily cash profits from our miners, we are able to hyperscale development of our platform and position ourselves at the forefront of the evolution in the HPC arena,” states Will Roberts.
Further discussing the significance of leveraging the bitcoin mining process to enhance the development of next-gen HPC solutions, Daniel notes that the powerful economic incentives in bitcoin mining create a significant price signal to encourage innovation. “The profit focus in bitcoin mining, with potential revenue every second, makes it an incredible market-driven environment where relatively minor improvements in operations and computing efficiencies can deliver substantial bottom line results,” adds Daniel. As a company, Iris Energy is at the forefront of innovation with respect to HPC efficiency and designing the optimal operating environment for stateof-the-art microchips; harnessing next-gen networking, electrical and data center transformation. “In the next five to ten years, bitcoin mining is absolutely poised to drive innovation in the traditional computing space, specifically in HPC applications, and the best part is that we are being paid handsomely by the bitcoin protocol in the process,” states Will.
Since its inception in mid2018, Iris Energy has merged with Canadian data center firm, PodTech and internalized a 30 megawatt project, state-of-the-art fabrication facility, management team and proprietary data center design. In addition to assembling a top tier team of finance, energy infrastructure, engineering and digital assets professionals, Iris Energy also has two major Canadian stakeholders: Brian Fehr (Order of British Columbia and Canadian industrial magnate) and Brian Fry (co-founder of RackForce, built into Canada’s largest cloud infrastructure provider).
Looking ahead - Iris Energy‘s data center infrastructure and platform is poised to expand aggressively into adjacent HPC, energy-intensive and cost-driven computing activities; servicing applications spanning artificial intelligence, machine learning, smart cities (IoT), rendering, healthcare, and more. In pursuit of this goal, the company is moving to raise additional capital to continue developing its projects in North America. In tandem, the company continues to be well positioned to capitalize on bitcoin mining as a misunderstood but maturing asset class with the increasing acceptance of bitcoin as a valuable, scarce and uncorrelated asset in a relatively uncertain environment for global finance and traditional capital markets.