Wachsman speaks with Charlie Schumacher, VP Corporate Communications at Marathon Digital Holdings
Why has Marathon made environmental impact such an intense focus? In particular, why is this critical for the Bitcoin industry?
There are a couple of reasons. Fred Thiel, chairman and CEO of Marathon, is very passionate about the space. As a parent, he often speaks about hoping to leave future generations with a planet that is hopefully better than the one he inherited. For him, it’s personal.
On a practical level, there is also a market component. Marathon is a public company and environmental impact is something that our investors care about. Fortunately, Bitcoin mining and renewable energy happen to be synergistic. Renewable power is often stranded or wasted, which means it’s cheap if you know where to look. So by pursuing renewable energy as a source of power for our miners, we actually have an opportunity to reduce our operating costs.
Tell us about what Marathon is doing.
One analogy I like is to think of the electrical grid as if it were an airplane. It’s running a flight back and forth all the time, but the seats are not always full. What if someone came along and said, “We’re going to buy all the extra seats, and by doing so, we will reduce the unit costs of the airline, and subsequently the ticket price for all other passengers.”
The US happens to produce a lot more energy than it consumes, and there’s not adequate battery storage at grid level to hold the surplus. This means stranded, potentially wasted energy — especially for renewables. Additionally, there’s a shortage of transmission lines in this country relative to production, which means that power that is produced and available for use has no way of reaching consumers. Marathon is making use of this excess energy that might otherwise go to waste, and partly because of this, we are on track to be 100% carbon neutral this year. That’s something we’re incredibly proud of.
How do you see your role in advancing climate initiatives not only nationally but globally?
We are proud to be working with partners globally on addressing energy challenges. As an example, Marathon recently formed a strategic partnership with Zero Two to build the first large-scale immersion Bitcoin mining facilities in Abu Dhabi.
The concept of grid stability and the ability of miners to absorb excess energy resonated with them because Abu Dhabi faces a significant energy consumption disparity between the summer and the rest of the year, due to high demands for air conditioning in the hot season. However, due to the necessity of running the power at the same capacity throughout the year for water desalination purposes, energy is wasted. It has been estimated that this amounts to about $600 million in lost revenue annually.
The collaboration between Marathon and Zero Two means that Abu Dhabi now has a flexible and interruptible base load customer that can help stabilize their energy grid. We see this project as the E in ESG, being intrinsically linked to the S for social good.
How are you tracking your impact?
We’re collaborating with an external third party to assess our emissions. Bitcoin miners like Marathon don’t have large Scope 1 emissions because we predominantly run data centers that consume electricity. However, we do have Scope 2 and Scope 3 emissions, all of which we are looking to reduce or offset with renewable energy credits (RECs) or other means. It’s a time-intensive task of looking over energy bills, but conducting backward-looking studies helps us accurately understand our consumption mix and pave the path forward.
Zooming out for a moment, what is your comment on the blockchain industry as it relates to ESG?
At Marathon, we are not about virtue signaling. We are genuinely focused on creating a better future, and we believe Bitcoin and Bitcoin mining are part of that future.
In my view, people who are drawn to blockchain tend to have at least one thing in common: believing we can change the world for the better with technology. Whether it’s the idea of individual ownership and financial autonomy through Bitcoin, or empowering artists to retain creative control over their work, we have conviction in the transformative capacity of blockchain. While opinions on achieving specific goals may differ, I think we can expect to see incredible work in the ESG space from several blockchain, but especially Bitcoin mining, companies over the years to come.