Blockmate chairman discusses Bitcoin mining strategy - ICYMI

Blockmate Ventures Inc (TSX-V:MATE, OTCQB:MATEF) chairman Domenic Carosa talked with Proactive about the company’s entry into the Bitcoin mining space through a newly formed subsidiary.

Carosa explained that one of the most efficient ways to acquire Bitcoin is by mining it directly, often at nearly a 50% discount to the spot market price.

The company has secured land adjacent to a substation in Wyoming and plans to begin operations at 10 megawatts, with the potential to scale up to 200 megawatts.

Proactive: All right, welcome back inside our Proactive newsroom. Joining me now is Domenic Carosa. He is the chairman of Blockmate Ventures. And Domenic, it's great to have you back again. How are you?

Domenic Carosa: Fantastic. And even better that we've made a big announcement in the Bitcoin mining space today.

Absolutely. Let's talk all about it. So, this is going to be a new subsidiary of the company that you're creating. You're going to spin it out. It's going to be a really interesting one. Talk to us about the thought process behind going into this.

So first and foremost, we are long-term believers in Bitcoin. One of the best and most cost-effective ways of acquiring Bitcoin is to actually mine it. We can typically mine it at almost a 50% discount to the current spot price. We managed to acquire land literally opposite a substation in Wyoming. We've now secured that location and are in the process of electrifying it. We will start with 10 megawatts and ultimately, in the longer term, build it out up to 200 megawatts. At full capacity, that would mean 200 Bitcoins a month — very significant revenue for us. But obviously, we're taking baby steps first.

Absolutely. There’s obviously capital that's going to be needed to get this up and running. So talk to us a little bit about how this is going to be put together and funded.

Reducing dilution for Blockmate's shareholders is first and foremost. We're taking a similar approach to how we raised capital for Hivello, one of the other investees within the Blockmate group. We raised money within the private entity, so we didn't have to dilute Blockmate shareholders. We're looking to do exactly the same for Blockmate Mining. We're currently at the Bitcoin conference here in Vegas, which is the biggest North American trade show. We’ve got numerous meetings with investors. The core focus is to raise money within the private subsidiary — either through some kind of convertible note structure or by tokenizing the forward hashes we're going to be creating. These approaches mean Blockmate does not need to raise capital and will not need to dilute shareholders, just like we did with Hivello.

Domenic, you talked about the ramp-up to 200MW. Tell me a bit about the long-term play of this and why that’s so important.

The other way to look at what we're doing is really an energy play. We've got energy at 3.3 cents per kilowatt, which is very attractive globally. We're going to start with Bitcoin because as soon as you start, you have revenue generation immediately. However, the long-term horizon is really AI. There is significant demand for GPUs in AI, and they consume incredible amounts of power. Having a piece of land electrified next to a substation where we can access 200MW is a fantastic opportunity for Blockmate shareholders. So we're starting with Bitcoin, but longer term you’ll see us doing deals and partnerships with AI firms to roll out AI across the facility as well. But once again, we’ll crawl before we walk — start with Bitcoin, start with 10 megawatts, and then grow from there.

In the news release you mention the potential to spin it out into its own publicly listed entity. Is that more of a longer-term goal right now?

I'd say that’s more of a medium-term goal. Our strategy at Blockmate is to spawn new companies and new ideas, build them up to a certain point, and then either sell them or list them on the TSX or Nasdaq. My view is this Bitcoin mining operation — or potentially the AI operation — will be substantial enough to deserve its own Nasdaq listing in the medium term.

Quotes have been lightly edited for clarity and style