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Unpacking the Crypto Mining Industry and Competing Nations with Fred Thiel, CEO of Marathon Digital

November 16, 2022

Fred Thiel, CEO of Marathon Digital Holdings, shares insights about the Bitcoin mining industry. Thiel explains their innovative approach of partnering with power companies to leverage surplus energy for Bitcoin mining. Notably, the company holds all of the Bitcoin it mines, and their investment in Bitcoin has proven highly profitable. Thiel emphasizes the shift in global Bitcoin mining dominance from China to the US, highlighting the industry's increased decentralization and growth opportunities.

00:03 Introduction: Fred Thiel, CEO of Mara Digital Holdings on Real Vision.

00:38 Background: Fred's journey in the technology industry from the 70s to now.

01:52 Transition to Mining: Differences in building Marathon Digital Holdings compared to other tech companies.

03:01 Mining Model: Uniqueness of the Bitcoin mining industry.

04:04 Bitcoin Investment: Mara's decision to hold and invest in Bitcoin.

05:13 US in Crypto Mining: The rise of mining in the US and decline in China.

07:33 Global Opportunities: The potential of mining in regions like Africa.

08:40 Renewable Energy: The relationship between Bitcoin mining and renewable energy.

09:12 Closing: Invitation to Elon Musk and Real Vision's offerings.

Transcripts are autogenerated. May contain typos.


fred thiel ceo of mara digital holdings also known as mara on the stock exchange welcome to real vision it is such an honor to have you finally on the platforms of real vision how are you today i am awesome thank you really appreciate being on of course now fred you are so well known across them in this community of us so tell us a little bit about you know just who you are and what you do well i'm ceo of marathon digital holdings since april of this year i've been on the board of the company since 2018.


i've been in the technology industry for 40 years started writing software for banks when i lived in london way back in the late 70s have worked across almost every sector of the industry was very involved in deploying initially ethernet technology early when pcs were first released helped build out some of the infrastructure for the internet back in the late 90s took a company public that was one of the first enablers of controlling devices over the internet so the earliest part of the iot world if you would um and then was in digital


games media ad tech storage ran a private equity fund that invested in software companies transitioning them from perpetual licenses to sas companies and i've been an advisor and on a on the boards of many private equity and venture-backed companies ever since and i got involved in marathon really because of a friend who i'd known for 20 years became ceo of uh what was then called marathon patent group and he was charged with taking them into the future and uh so he asked me to join the board in 2018 and together we worked out the


strategy for really becoming what we are today which is you know one of the largest miners in the world great so fred i do want to ask you someone with obviously the finance background the tech background and four decades of just a good track record of building now you know in the world of mining which is all based on the focus of building what is different this time round in building a company like mara marathon digital holdings because you are i would say start from the ground zero again despite having four decades of building because


you know i sort of look at this space and you know once you're in it it's a million miles per hour is that how you feel even since just i guess running the place since april yeah it's this is a unique industry to your point um you know we manufacture the product that is the exact same as everybody else's if you put it in a traditional context you know when you think about bitcoin mining we're running data centers we're trent we're processing transactions that ensure the security of the blockchain and the validity of the


data on the blockchain um but we don't have sales teams out selling we don't have a pipeline of sales because we just mine millions and millions of transactions and we're rewarded from the blockchain in uh bitcoin for that so it's different than most tech companies where you're really focused on winning logos and growing um and again this is something more unique to us than some of our peers because we're not in the third party hosting business so we're not out trying to convince people to host with us we


actually partner with large power companies and others and help them really utilize their excess power to be in the mining business and then we bring our miners and our minor expertise uh to that uh party so it's a it's a very different model you know you're making a product where you can't differentiate your product you don't have sales people um it's really focused to your point on execution of growth how do you source minors how do you source power places to host them how do you operate them at maximum efficiency and


then on top of it we hold all our bitcoin we don't sell our bitcoin wow long time big holders i guess absolutely and you know it's so much we believe so much in bitcoin that uh in january late january of this year uh we had a lot of cash on our balance sheet and you know michael saylor famously had started talking about you know companies should put money where their mouths are regarding bitcoin and crypto is a much better investment so we went in the market and actually bought 150 million dollars of bitcoin with our cash


at an average price of around 31 000 and obviously with bitcoin just crossing 60 000 this morning um that has been a excellent investment for us and all of the bitcoin that we mine we hold today we hold over 7000 bitcoin in our balance sheet and um we really believe long term in the value of bitcoin and are very optimistic about what the regulatory framework in the us is going to be so we're really looking forward to balance of this year and next year to see how that matures and this becomes a real regulated in a good way industry what


are your thoughts on that that you know some of the biggest mining companies like yourself is on the grounds of america now yeah it's very exciting um not just from a perspective of the fact that uh the u.s is taking a lead position here but um if you think back you know six months a year china had the majority of the bitcoin mining network operating uh within its borders and there was always fear within the bitcoin community and outside of it frankly that the 51 attack as it's typically called which would be the only


way that you could uh effectively um game the bitcoin network um could be possible if china really wanted to and by simply prohibiting bitcoin mining and going to the extent that they are today with controlling their currency and capital flows has given the bitcoin network the opportunity to exhibit two of its most amazing traits one is no nation state can control it you know there was not a single hiccup between the 40 to 60 percent of the global hash rate that was within the borders of china being shut down it just


automatically transitioned to all the other mining facilities around the world that's that is one of the key attributes of bitcoin and how it operates in that it is impervious to government control in that sense the other thing is that it really gave the us i believe and we'll see this play out more over time here the opportunity to now that that risk is gone let's really start backing bitcoin and you've seen major corporations major financial institutions now feel that that risk of international uh potential control and


manipulation is gone and uh as i think there was an article in the ft uh here this week that you know clearly laid out the numbers you know the u.s is now arguably 35 percent of the global hash rate yes i read that and that was the all the the headlines in the news industry this week yeah and so i i don't think you know we'll see the us being over 50 nobody wants that in the industry but i think 30 to 40 percent in the us would represent the us's pro rata share if you would of the opportunity and you know


there would be many more opportunities in europe for example if they didn't have an energy issue which they're going through today um but africa for example is the perfect area of the world for bitcoin mining when you think about it they have access to hugely inexpensive energy if they want to look at nigeria as a country you know oil producer uh think about solar energy in north africa in the sahara it's bone dry it's hot yes but perfect for bitcoin mining all of these areas of the world where


it doesn't make sense to deploy renewable energy today because there aren't consumers bitcoin is the perfect reason for countries to deploy renewable energy because we're a single stop customer we can operate on the grounds of the power generating facility so you don't need transmission lines you don't need to build a grid infrastructure and then once that power is established they can then also sell excess power to consumers and so we become a motivation for governments for countries for energy companies to deploy more and more


renewable energy and if you look at the percentage of energy that is let me jump in there because i know because i know energy is your thing at the moment and i know by the way is that called it elon musk because he finally got back to you elon if you're watching on real vision this is the pitch for you to come on a panel to talk with fred hey if you like this clip be sure to like and subscribe for more crypto related content also be sure to check out the full interview and more only on realvision.


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