Lord Of The Rigs: The Future of Mining Hardware | Bitcoin 2026

Thank you for the incredible introduction. Um, my name is Mitchell Ascu. I work for Blockware. We are the top hosting provider and ASIC broker in the United States. We help investors get tax advantage exposure to Bitcoin through Bitcoin mining and bonus depreciation. It's a pleasure to talk with these guys here today. They are really on the cutting edge of the physical infrastructure that defends sound money. So, really excited to unpack Bitcoin mining. Um, I love the title of the panel, Lord of the Rigs. I think the miners hold the power of the network like uh the ring and lord of the ring. So I'll start with the question that I'd like to hear each of your perspective on. One of the predominant trends in Bitcoin mining history has been massive improvements in energy efficiency with each generation of hardware. Right? In terms of jewels per terahash or watts per terahash, gains were made, you know, by leaps and bounds throughout most of Bitcoin's history. But over the past few years, those gains have become smaller and smaller. And so my question is, are we reaching that ceiling in terms of energy efficiency? Is this 10 watts per terahash range the ceiling of what may be physically possible? Rez, I'll start with you. >> Okay. Look, I I I think that's a good question in terms of um energy levels and frankly speaking, there's a lot of very smart people in this room and all over the planet who will almost certainly figure out ways to make uh chips more and more efficient. But from our perspective, the issue isn't just about the number like absolutely we see a lot of uh efficiency gains that could potentially come and they may decline over time. But the bigger question that has come up as you know we're all everybody in this room knows there are a lot of pressures on the industry. So the the real question now is what are the efficiency levels that any Bitcoin miner can achieve on a full stack basis. And by full stack what I mean is chip design, the price of the machine itself, operating expenses, infrastructure, power costs. you've got to look at the entire picture in terms of what kind of efficiencies can be derived or what improvements you can get in that space. Uh we personally believe that a fully integrated model is better suited for making sure that we realize and continue to create more energies along those lines. One interesting point that I don't hear about as much but I think because I'm a recovering banker so I got to think about it is the cost of capital because we have to also think about is there's a lot of alternate uses for the capital. So when we think of power cost when we think of infrastructure cost but hey AI and data centers are competing for it they're also competing for the capital. So as we look at efficiencies, we also have to look at the efficiency of capital as part of the full cost structure of efficiency. >> Yeah, that makes a lot of sense. Pang, I'd love to hear your thoughts. >> Thank you. Thank you, Rich. Um, so Bitier has been delivering I mean a power map since like two years ago from A1 to A4. These days we are we just released A4 which is 9.45. We're I mean the track of the execution really matters and bitcoin the market this market is always repetitive and hierarchical and all of the bitcoin investment makes wars of every dollar saved that's our target um I I agree with like raising he just mentioned like the systematic always matters that's bit dear has the fully integrated from the ground like from every like chip design and we have the infrastructure design and we own the energy that's our strategy. Thank you. >> Yeah. So I think yeah from the point of ad wheel yeah uh it's very hard to just have the deep optimizations and gain the huge improvement for the next generations because all the advanced model currently used the most advanced technical node. So we can see that uh for the futures uh the the the deep uh optimizations that comes from the semiconductors and uh of course there still have some rooms to just do optimizations for next generations but we believe the margins for the design optimization should be less and less. So this is a trade. We believe yeah in the futures everyone can just have a machines for long spay. So I agree with yeah mutual that uh I I can say currently not only uh the power efficiency is important but the whole systems is also just what you can think and what you need to just spend your effort on that. >> Yeah Max your thoughts. So I think for a very long time miners focused entirely on jewels per terash, maybe a little bit on dollars per terash. And then when we went out and talked to miners, what we found is that suddenly what was happening over multiple cycles is their profits were being eaten away by machines breaking. Their profits were being eaten away by the operational costs that come with reacting to power costs and reacting to advancements and new miners. And uh they were being eaten away by support costs. they were being eaten away by managing capital. We talk about cost of capital here and I think that what the industry needs to focus on and certainly what we're focused on at Proto is how do we bring rigs that are durable, rigs that are repairable, how do we bring customer support that meets miners where they are, keeps their uptime really high. Uh we found in the industry that when folks look at uptime, a lot of miners, they don't even have the tools they need to measure it. They're looking at how often miners were on and not their actual full ROI. Miners are out to maximize profits. And what we're focused on is helping them across a ton of different dimensions that contribute to that. And that's everything from customer support and durability all the way through payment terms, creative structures for deals, and providing hardware. Uh, and I think that's the future of of mining. >> Yeah, that makes a lot of sense because mining is very much a dynamic situation, right? You've got the Bitcoin price to consider, mining difficulty, watts per terahash, dollars per terahash. There's a lot of variables that go into the calculus when you're making an informed decision. Max Proto has a very unique approach to designing machines with the modular approach, right, where you could replace parts of the machine and mitigate future upgrade costs. Can you speak a little bit about the benefits from an operator's perspective of the proto rig and also some of the challenges you've faced with this design style? So proto rig is a modular system. So we're focused on making it easy to for example swap out hashboards across generations, making it easy to do on-raing fans, changing hashboards. Those are 90 seconds leave the machine on the rack. It's very different than a lot of past approaches. And the way we got here is we saw a lot of singleuse disposable rig or approach to managing fleets uh in the mining space and we saw what that was doing to miners profits and we wanted to bring something that basically makes more of the minor infrastructure. So you don't see people throwing their facility away every time there's you know an adjustment to power pricing. Uh you don't see people throwing their PDUs away and lots of other parts of their infrastructure away. And what we our observation is basically that there are lots of other parts of the machine that can last for multiple cycles when they're built and designed and and deployed correctly as well. And so we basically tried to bring more of the minor into what miners consider infrastructure and that brings a ton of benefits for them. Now of course it's not without challenges but it's challenges that we know well. So, we're part of Block uh which also makes Square and Cash App. And Square is a massive payment terminals business in the United States, uh as well as a few other countries. And one of the things that we have been through the ringer on is these are devices that are in restaurants where people are spilling drinks on them, where a busy server is knocking off the counter in between shifts. These are boat captains that take our devices out to sea. We've been through everything you can imagine in terms of reliability for hardware and we have the system design expertise from shipping tens of millions of devices at block and way more than that previously for a lot of our team at Apple. And basically with those two things together, we're focused on building systems that last and processes and customer support that help miners for the few times where things do fail. >> Welcome to predict. The world is a market. Everything is a market. Get a 100% cash back up to $100 on your first predict bet if it loses. Predict where everything is a market. Yeah, I'd never thought of that with the square terminals. If you can uh build a piece of technology that can, you know, sustain beer being spilled on it, right, and apply that same framework to Bitcoin miners, that's probably going to be very beneficial for the operators. Whereas, I would love for you to kind of opine on this tradeoff between energy efficiency and then the actual capital cost of the units. Right? right now with Bitcoin being you know so low in price relatively speaking you know there could be an argument made that as the price rises energy efficiency will be less important compared to cost of capital so what are you thinking about in terms of this trade-off look I I think u there is a trade-off right the the reality is that you while the co the cost of capital let's kind of think about it like why do investors invest money they invest for a return right now. If the just like there are alternate users of the capital, there are alternate users of energy. So data centers are not going away. They're going to stick around. There's also populations increasing. There's also basic domestic and commercial demand for electricity. So if you're not energy efficient, there will be political and commercial pressures to push you towards energy efficiency. And if you're not if you do not do not answer that requirement, your cost of capital is going to go up because in why would investors back you when there are more energyefficient alternatives that are generating a better return. That's how you got to think about it is that it's kind of a chicken and an egg issue that the the if you're not a best-in-class player, the why should the investor come for you? And if just like there are competing uses for capital, there are competing users for energy and frankly all infrastructure. So you know we're talking like since we're all in the mining space cooling right if hydro right now we're seeing a lot of political pressure coming in various municipalities because uh the local community is concerned about water utilization. So you got to be efficient across the board on your entire capital stack. Uh well, not capital stack, your operating stack because that's what investors would would demand from you. >> I'm glad you bring up the hydrocooling systems. Right. This is something that micro BT has really been kind of pioneering a shift away from the air cooled units towards the hydrocooled machines. Can you talk a little bit about that transition and and everything around that? >> Yes. Uh I believe everyone knows that uh micro BT is the only manufacturers. We have the three type of the uh mining models uh including air, immersion and hydrate. So from the start we think that in the futures yeah uh maybe the lifespan for uh for the mining machines would run over yeah maybe two years and even more for the air coolings. I think due to the warranty period uh yeah you may need to spend a lot of times yeah to just fix the problems and uh you need to just upgradings for the futures just as we discussed the optimation optimization rooms is is not just a huge in the futures. So you may expect it to run your machines longers and this is the reasons why we start to just uh try to promote yeah the hydro instead of the airs for the airs because everyone knows that uh yeah the duster some other operation conditions would infect the stable operations but for the hedros yeah due to the cold plant yeah constructions it would help you to just run your operations stability. So this is yeah quite simple and uh yeah we won't introduce the hedros to anyone right now but but not uh before actually this is a good time yeah we can just uh give also the cost efficiency ways to introduce the hydros. So right now you can see that uh our maybe hydros plus the systems would just equal to the air coolings. So it it's just easy for customers to do the conversions and easy to just choose which which one they like to have. Yeah, that makes sense. Pang, you were mentioning earlier you have a machine now whose efficiency is under 10 watts per terahash, 9.45 to be exact. What was the biggest engineering hurdle in reaching that level of energy efficiency? Well, we're I mean it's a great question, but somehow we're not able to disclose the R&D details for sure. Well, I mean as I just mentioned the execution for us as what the track of the execution is very important for us. We we don't what we have published like few years ago and you know it the R&D always need people, money and patience. So what and also we are seeing the the wide uh the wide margin of bitcoin mining and it it just it just takes time. So for I mean we we're not seeing there is any uh limits on the jar of trash every every time the market brings the flaws and floors moved. So we believe there is also head rooms you know ahead of us we can always move away and we can always move forward. Yeah, >> one of the biggest stories in Bitcoin mining over the past really two years has been this sort of secular transition from Bitcoin mining to artificial intelligence specifically along among the the large data center operators. Are you guys keeping this in mind as you design Bitcoin mining machines in the future that hey, you know, our target demographic might not be these massive gigawattsiz facilities. instead it might be smaller miners that that are kind of the only ones left when the dust settles. How how do you think of this AI pivot when it comes to designing these miners? Anyone's open to take this? Maybe I'll jump in with a little bit of an unusual viewpoint. So I think AI is resulting in a lot more power buildouts and so top of mind for us isn't really hardware. It's actually another project that we released which is protofleet. So when we announced Proto Reagan protofleet last year, uh in addition to making hardware, we announced a free and open source project that's a mining management system. And you might wonder what's the relevance to AI. And you might also know that Block is on the forefront of adopting AI tools for developing basically everything that we do. And one of the things I think is really interesting about a free and open source project in the mining space where so many things are closed is that in the age of AI so many more people can modify it. So in the past once I said free and open source project a lot of people's eyes might glaze over. If you're not a software developer what are you going to do with that? If I give you a GitHub link what are you going to do with that? In the age of AI, you can go to Claude and say, "This incredible open source project that I just started with, I wanted to do one more thing." And it turns out that in 2026, that one more thing is probably going to be done in 5 minutes. And so, we're really excited about where Proto Fleet is going to go being free and open source with miners able to adopt something that's easy configuration and management for their fleet, uh, but also helping them understand economics and infrastructure for a lot of the things that we're talking about on this panel. Yeah, that's very interesting. I'm going to have to uh experiment with vibe coding and proto fleet, right? Do you have any thoughts? >> Yeah. Yes. Uh for AI and minings, I think the key is K key issues is how we can just get the stability powers. So if you just have the experience to do the minings, you can just accumulate experience how to just maintenance your facilities and keep the operation stable. So this is something currently our customers start to do and based on such kind of experienced they also just introduced this part to AI and uh of course yeah from the technical side they have a lot of such kind of overlap and uh let me just quot our founder Dr. uh mentioned yeah for for minings we just enriched the applications for AI and what we accumulate such kind of knowledge how we can just maybe do better on AI side. So even the training age and all kind of AI applications yeah we may just can do the pilot project and shared experience with AI on the following. So I think also Macro BT would just try to yeah release the yeah maybe uh age applications uh maybe in coming soon. Yeah >> Pang do you have any thoughts? Um one thing I want to emphasize the I'm not sure whether I got question clearly but but I mean as if you're just saying the iss hyper specialized bit there doesn't consider that a way to make one like uh machine for AI and and also for Bitcoin mine that's kind of uh very difficult uh we're not very specialized and not supposed we're not see we don't think it's going to be possible to make that but there has been uh uh pivoting ourselves into AI since like three years ago we are spotting not just from the cloud service providers but also we're you know we have announced that Norway and a few other sites in uh Ohio. So we're we have been uh digging ourselves for a long time and one thing we're thinking the flexibility is to have in the MDC like Mo data center that's kind of the physible things we can we can move forward and um this is we that's why also we have like we're also very heavy in hydro uh cooling size like the two servers we believe the very similar um form factor as compared to the GPUs that will make sense Yeah, look uh I agree. Um I think ASIC chips for crypto mining for whether Bitcoin or the other coins also their very value is in the fact that they're very specialized. So I don't think you can kind of mix and match and say it can do both things because that's not where the value proposition is. Having said that, based on these answers and you know my our personal opinion also is obviously AI is not going away but our industry and the AI and the data center industry they're all both evolving pretty rapidly. So there will be different approaches tried. There will be different uh and you can just look at the diversity of answers that just came through over here that different models, different ways of coexisting if you will, not or collocation, coexisting, whatever you want to call it, but there will be ways of coexisting together uh that would have to be tried out and we'll see what kind of evolves. But you know there's even thoughts of colloccating both in the same site like you know basically what is called flexible demand response that you use the excess capacity for mining because so again there's multiple ways but there AI is here to stay data centers are here to stay and clearly crypto mining I mean you know cryptocurrency is not going anywhere so everybody will kind of have to I think figure out a way to live together. Uh hopefully in a year's time we'll have more clarity on how this is going to work. >> Yeah, I can say already we've gotten a lot more clarity over the past couple of years on how these two industries are really going to integrate. Like you mentioned, I believe the demand response is going to be sort of the the handin the glove fit for these two things where the Bitcoin miners can be that flexible load while the AI servers, you know, continue to to hum, right? I would love for you to discuss something that our two companies announced recently this week which is that MicroBT has uh deployed a strategic investment into blockware. Can you speak a little bit about why we did this partnership and you know what the benefits are for MicroBT to work with someone like Blockware? >> Yes, right now as everyone know MicroBT uh still want to be the maxims on Bitcoin. So we would just insist on the development of the miners and we also want to help the anyone yeah to just do minings and uh make the whole industry health. So uh we do not want to just introduced some trading policies. Currently our strategy is try to just make some uh strong uh relationship with our partners. So uh this times we investor blockware. Yeah. to just demonstrate our maybe uh ambitions and uh we try to let everyone know uh micro BT want to do yeah uh bitcoin minings for long terms and also yeah blockware is very uh famous and uh they just released such kind of yeah uh maybe online yeah service and uh also just helped the end users to get the hash rate easily. So I I think uh with our support uh blockware also can just maybe get the latest models and bring the benefit for the end users. This is a win-win solutions and also it's our strategy this year. >> Yeah, I definitely agree and I think it's going to be a 1 + 1 equals three type of partnership, right? I would love to hear each of you, you know, as as we kind of wrap up here, tell me what's one thing you're most excited about in this space of Bitcoin mining and AI. Rez, I'll start with you. >> Uh, I think what we're most excited about is as our company just as our company or you know, our our excitement right now is we've recently announced the tape results for our Bitcoin chip. Uh, it marks a massive evolution in our company. We've, you know, historically we've worked on altcoins and the goal was always to go towards the bigger currency and uh we're very excited about the prospects and uh outlook for our Bitcoin chip. Uh we've just uh I think there's some social media photographs and stuff that's out there on our uh sort of our consumer focused version of it. Uh it's a prototype at this point, but that's what's got us excited right now. >> Ping, what's going on at Bit Deer that you're excited about? I mean we we're focused on the the chips design and energy and I mean most of things we have uh integrated in our like you have the four full portfolio. Well we have the four technology here but we want to grow together always this community. Um I I got the most questions today is like uh why be they're clam climbing our hash rate. I mean um it's always because of the market but no matter what what it is right it's just market so we want to survive with each of us it's just here so I mean to grow together that's we're we will never leave away from Bitcoin mining never >> I love to hear that and I can confidently say the same thing for Blackware we'll never leave Bitcoin mining right what are you excited about >> so for Bitcoin mining I think the most important things is to just get the uh maybe lowest power efficiency. So, uh all kind of yeah improvement comes from the chips and uh we just introduced the focus design methodology to just maybe change the mining industries. So we want to just bring this kind of methodologies to AI and uh delivery the uh low power chips for the aging yeah inference chip in the futures and we can just share the fundamental knowledges for both AI and minings in the future. >> Max, this is a tough one. Uh we have a lot going on. Uh I think the first thing I'll highlight is I'm really excited to see more and more people get value out of proto rig. So, as we've gotten to deploy that and work with customers, I think we're seeing some really exciting things and I'm excited about the trajectory there. The second thing I'll highlight, I talked briefly about before, which is Protofleet. And what I'm excited about is where we're headed. So, today Protoleet is mostly focused on kind of the core parts of uh managing a mining fleet. But where we're going is more protective capabilities. So, this is something we talk about in other areas of block. So instead of error alerting and paging an on call or contacting your operational team, we're building towards a system that gets in front of those things for you. Instead of, hey, this fan is broken. Go change this one. It's next month I check the weather and you know what, you should probably order about 60 fan modules right now because this is the harshest time of the entire year. and based on your data from last year, you're going to need this. I've identified a source for that. Let's go ahead and purchase it or things that are getting ahead of uh capital expenditure management. And so we're headed towards identifying those things, showing them to folks and really serving as an adviser. So maybe a human still makes the final decision, but a ton of the work is done before that. >> Yeah, that's very interesting. Everybody, please give these gentlemen a huge round of applause. Thank you for watching. >> Every year, this community comes together to celebrate, to debate, to build what comes next. And every year, the stage gets bigger. Sound money, center stage. So, where do you go to celebrate the next chapter in Bitcoin history? You come home. Nashville, July 2027.