Hello,
Bitcoin mining is a paradox. It is built on mathematical certainty. At the same time, it is shaped by geopolitical chaos, energy markets, and speculation.
Nick Hansen, CEO of Luxor, understands this balance. We explored mining’s core dynamics: hashrate vs. price, energy costs, and why miners chase cheap, stranded power.
Miners are more than just proof-of-work mercenaries. Hansen sees them as flexible energy consumers stabilising grids, incentivising renewables, and embedding Bitcoin into real-world infrastructure. When Texas freezes or experiences a heat wave and power prices spike, smart miners:
Shut down machines ("curtailment")
Trade hashrate futures for exposure
Luxor is bringing financial engineering into an industry born in basements and garages.
The mining evolution was accompanied by the hardware cycle—GPUs to ASICs and beyond. Nick explained how Marathon Digital’s contrarian bet on S19s (the latest mining machines at the time) in 2020 helped them dominate later. Miners are now using hashrate futures, just like oil producers hedge risk.
Then there’s the looming question of fees. Bitcoin’s block subsidy is shrinking. Miners earn block subsidies and fees. The subsidy halves every four years (210k blocks), making up ~95%+ of miners’ revenue. The remaining ~5% comes from fees users pay to transact. As subsidies decline, higher fees must compensate for miners to remain profitable.
Some believe fees will naturally rise, but Hansen is sceptical. We discussed Ordinals, Runes, Babylon, and OPCAT—a potential upgrade that could enable trustless Bitcoin bridges but also require the kind of Bitcoin fork that’s become nearly impossible to push through.
We explored what it takes to build in the Bitcoin ecosystem long-term—the risks, incentives, and what mining looks like after the last Bitcoin is mined. Enjoy diving deep into Bitcoin mining with Nick and me!
Thinking about booms and busts,
Saurabh Deshpande
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