Converting piles of waste coal back to land with bitcoin

How it works: Stronghold describes itself as vertically integrated.

• The two pieces of the bitcoin mining equation are electricity and mining rigs. Stronghold can generate its own power and directly owns most of its own bitcoin mining machinery (the specialized computers that make guesses to decrypt blocks of bitcoin transactions).

On one level, all bitcoin miners are the same: Who can throw the most power at the problem of decrypting bitcoin blocks?

• Stronghold's differentiating thesis is that large capital investments are worthwhile if it gives a miner flexibility over its cost of power.

What they're saying: ""Our whole model is based on the idea that if power prices are high [from the grid], we will generate our own power," he told Axios.

• "If you buy machines and you're paying a third party to run them and you're buying your power from another party, what's your operational advantage?"

The intrigue: Its claim of environmental benefit is based on where it gets that power from.

• It operates two coal ash sites for a combined capacity of 165 MW, burning the waste left over from coal-burning power plants and converting it to detoxified ash that can be reused in a variety of ways.

Beard presented in front of the Pennsylvania legislature arguing that bitcoin mining has been the best way to fund land reclamation and retire piles of toxic coal ash accumulated over the state's many years of coal usage for power and steel production.

• The advantage of burning off the ash, he argued, is that they can control more of the contaminants released into the air versus when the piles burn on their own.
• Coal ash also pollutes waterways. As such operations diminish those piles, Beard argues, that pollution decreases.

The other side: Environmental groups agree that coal ash is a problem, but they have been opposed to burning it off as a solution.

• "Cryptocurrency in Pennsylvania is a big deal because these sorts of operations threaten to increase pollution where we have seen decreases," Charles McPhedran, an attorney at Earthjustice, told Fox56 in Pennsylvania.

Zoom out: A lot of political rhetoric has been directed at bitcoin since the boom of 2021. Most relevant here: the Biden administration's push to tax miners's power use, but Beard has not invested a lot of his own energy in fighting it.

• "You can debate whether or not bitcoin is good or bad for society, but today we have a government that hasn't put the heavy hand of government on uses of power."
• He pointed to a couple other industries that people debate the benefit of and noted no one is arguing for a special tax on their power supply. "I haven't been overly concerned because it's un-American to do that," he said.

By the numbers: Stronghold's stock price is up, like most other healthy bitcoin mining companies, but it is up considerably less than others.

The bottom line: Early next year, each block of bitcoin won will earn half the subsidy in fresh bitcoin it earns now.

• "At some point those that have access to a cheaper source of power, ought to be differentiated in terms of margins," Beard said.

Go deeper

• Crypto mining advocate sees green business in abandoned gas wells
• Crypto gets down to work in D.C.