Why Bitcoin Mining Is the Ultimate Energy Investment With Beau Turner

In this episode of The Same Day Podcast, Yoni Schmidt speaks with Beau Turner, Owner of Abundant Mines, to discuss why Bitcoin mining is the ultimate energy investment. Beau explains how mining transforms wasted energy into financial opportunity, outlines its unique tax advantages for investors, and shares why now is the “Goldilocks” period for mining returns. Beau also gives advice for first-time investors looking to enter the Bitcoin mining space.

Beau Turner is the Owner of Abundant Mines, a US-based company that provides turnkey, sustainably powered Bitcoin mining services for investors seeking passive income and tax-advantaged strategies. With a background in engineering management from Southern Methodist University and nearly a decade in real estate investment, Beau transitioned into cryptocurrency in 2015 after firsthand experiences with both the risks and rewards of early mining ventures. Beau’s mission is to promote financial sovereignty and human flourishing by helping others build generational wealth through Bitcoin while avoiding the pitfalls of unsustainable or misleading crypto schemes.

Here’s a glimpse of what you’ll learn:

• [2:13] Beau Turner shares his journey from real estate investing to launching a Bitcoin mining company
• [4:39] Challenges of transitioning from physical real estate to digital infrastructure and finding reliable operators
• [6:14] Explaining Bitcoin mining in simple terms and why it’s like refining gold
• [7:46] Common misconceptions about Bitcoin’s non-physical value and energy consumption
• [10:15] Why real estate investors are drawn to Bitcoin mining for tax advantages and depreciation benefits
• [12:43] Comparing mining Bitcoin to buying it outright
• [15:31] How investors can get started with Abundant Mines for as little as $10,000
• [35:32] Abundant Mines’ future plans to expand data centers and balance energy grids in the Pacific Northwest

In this episode…

Bitcoin mining often sparks headlines about energy consumption, environmental impact, and complex technology. But what if this misunderstood process could actually be the key to unlocking more efficient, sustainable energy systems? Can Bitcoin mining serve as both a wealth-building tool and a revolutionary energy investment?

According to Beau Turner, a passionate entrepreneur and crypto mining expert, Bitcoin mining isn’t just about generating cryptocurrency — it’s about harnessing and redistributing energy in smarter ways. He highlights how mining operations act like flexible energy consumers, capable of reducing demand during peak periods and stabilizing grids. This dual role turns mining into a powerful bridge between renewable energy sources and financial returns. By leveraging hydropower in the Pacific Northwest, Beau explains how mining can lower regional energy costs, offset grid strain, and create passive income for investors seeking both sustainability and profitability.

Resources mentioned in this episode:

• Yonatan Schmidt on LinkedIn
• Mat Zalk on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Beau Turner on LinkedIn
• Abundant Mines
• “Exploring New Possibilities in Entrepreneurship” with Chip Gaberino on The Same Day Podcast
• “Revitalizing Communities Through Multi-Concept Restaurant Development” with Elliot Nelson on The Same Day Podcast
• “The Future of Financial Advising: Building Relationships Over Returns” with Morgan Martin on The Same Day Podcast
• Bitcoin Core Software

Quotable Moments

• “Bitcoin mining, in the simplest terms, is just taking a raw resource energy, running it through a computer.”
• “I needed to build the business myself and build the service that I wish I had.”
• “Every good currency or every good wealth storage vehicle takes energy to produce and, in some sense, is like a battery.”
• “You can’t buy Bitcoin to offset it. You can buy miners and pay for electricity.”
• “The machines that people are buying today are much more likely to be highly relevant for years.”

Action Steps

1. Start small with Bitcoin mining investments: Beginning with one miner allows you to learn the process without overwhelming risk.
2. Leverage Bitcoin mining’s tax advantages: Utilizing depreciation and operating expense write-offs can significantly reduce your taxable income.
3. Focus on sustainable energy sources: Partnering with renewable energy providers ensures lower costs and aligns your mining operation with environmental goals.
4. Build relationships with trusted operators: Working with transparent, skilled managers prevents costly mistakes and improves long-term mining profitability.
5. Plan for long-term equipment relevance: Investing in modern, efficient miners extends the lifespan of your investment and protects against rapid obsolescence.

Sponsor for this episode…

Keyrenter Property Management:

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

Episode Transcript

Intro: 00:05

Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Yoni Schmidt 00:20

Hi there. Yoni Schmidt is hosting today’s episode of The Same Day Podcast where I connect with top business and real estate leaders. Past guests include Russ Cummings, Chip Gaberino, Elliot Nelson, and Morgan Martin. Today’s episode is brought to you by Keyrenter Property Management. At Keyrenter Property Management, we are a full service property management company helping our clients buy, renovate and operate real estate assets.

We help our clients build wealth while taking the headache out of property management. That is why no matter what rental you have single family homes, condos, townhouses, apartments, we have the management solutions that you need. Go to keyrenterpmc.com or email us at [email protected] for more info. Today’s guest is Beau Turner, the Founder of Abundant Mines, a company reshaping the world of passive investing through Bitcoin mining.

With a background in real estate investing and a degree in engineering, management and information systems from Southern Methodist University, Beau has built a white glove, renewable energy powered crypto infrastructure solution for investors seeking transparency, simplicity and sustainability. His mission is bold yet deeply personal. Empower every investor to unlock the full potential of decentralized wealth and build long term passive income streams through cutting edge digital infrastructure. Welcome to the show and thank you for being here, Beau.

Beau Turner 01:56

Thanks for having me, Yoni.

Yoni Schmidt 01:57

Yeah. So, Beau, let’s, you know, go back to the origin story, you know, walk us through the journey from real estate investing to launching a Bitcoin mining company. What was the moment you knew that? You know, that was your next chapter?

Beau Turner 02:13

Yeah. So it’s like any story non-linear and there’s tons of intersecting paths. But the simple version is I got my engineering degree, was exposed to Bitcoin while I was in school, and thought it was interesting, but didn’t immediately pursue it full time. I went from engineering into real estate development, you know, building the investing portfolio and really just kind of ignored it for a few years. And then 2020 came around and there was a lot of change in the world.

There was a lot of change in the way that I viewed the investing landscape. And Bitcoin came back into my field of view, and I knew that it had potential. I knew that there was something to be Discovered there or something to be really unlocked there for me personally. But I was very resistant to let go of my my real estate portfolio without getting something on the cash flow side. And for any of your listeners who know Bitcoin is not a cash flowing asset unless you go and lend it to somebody, in which case you’re taking on quite a bit of risk.

So what came to me was to get into mining, which is Bitcoin’s native way of essentially producing itself, of reinforcing the network. And that is just plugging in computers, using energy to verify transactions on a network and get paid in Bitcoin, which is a passive income stream. And so I had a couple of misadventures, one just a couple thousand dollars and another one with a host in Georgia where I bought half $1 million worth of equipment. And that did not work out well. That was a total loss where, you know, I saw the potential in the industry, but unfortunately the operators were were really lackluster and just not transparent and frankly, not good business people from what I could see.

And so I knew that I had the skill set to build these facilities and operate them. I wanted it to be passive and hands off for me and just be an income stream. But it turned out that I needed to build the business myself and build the service that I wish I had. And so that’s how Abundant Mines came around.

Yoni Schmidt 04:15

Yeah. That’s awesome. I guess, you know, talk to me about some of the biggest challenges you encountered. You know, when you transitioned from tangible real estate to a digital infrastructure. You mentioned, you know, some other challenges with operators and realizing that you just have to go and get your hands dirty and do it yourself.

What other challenges did you encounter when you were making this transition?

Beau Turner 04:39

Yeah. So like you mentioned, the operators were a big challenge for me, and that’s partially because it’s a young industry. There’s not a huge talent pool. And so unlike finding a property manager where I could just have someone come in and manage one of my rental properties. It was not easy to find a really skilled, really high integrity Bitcoin mine manager.

And so that was a challenge and thankfully was solved in a beautiful way where I met our our current lead technical developer Colin, on a site visit for a public miner tour. And so we got together, built a facility together and are still working together today. And the other thing that most people don’t appreciate or maybe don’t understand, is that these facilities use a ton of energy, and so you have to find sources of energy with lots of capacity that are cost effective. You know, you can’t just go hook up anywhere on the grid. If you’re paying most rates around the country, you’re not going to be profitable.

So you have to find some kind of edge in the energy world. And for us, that edge is hydropower in the northwest.

Yoni Schmidt 05:48

Wow. Interesting. Okay, let’s we’ll get into the hydropower maybe in a little bit here. But you know, for our listeners who are maybe new to the, you know, crypto world and, you know, don’t necessarily understand what Bitcoin mining is, can you tell us in simple terms what is what is bitcoin mining and why it presents such a unique investment opportunity?

Beau Turner 06:14

For sure. So Bitcoin mining in the simplest terms is just taking a raw resource energy, running it through a computer and turning that into digital money. And the analogy that I like to use is just like you would refine gold and go and mine for gold. It takes energy, it takes work, it takes effort. It’s not necessarily a linear process.

And the value in that resource is not just that it’s scarce, but that it’s hard to replicate and takes energy to go and produce. Same thing with Bitcoin. You can’t just mint it out of thin air with no energy expended, no effort expended. It takes computing. It takes energy.

It takes all of these raw resources and ingenuity to produce it. And the reason that it has value in simple terms is if as long as you believe Bitcoin has value as a scarce asset, as an investable asset, mining is essentially the process of protecting that network. So it’s kind of like a mix between the military defending a resource and visa, which is actually processing those payments. So miners are doing both of those things simultaneously. They’re putting up a cryptographic wall of energy that protects the network from attackers, and then also validating the transactions and making sure that funds can move across the network.

Yoni Schmidt 07:34

Interesting. What misconceptions do you see or do most people have about Bitcoin? Bitcoin mining as a passive investment stream?

Beau Turner 07:46

The hardest thing for most people to wrap their head around is is the is the value of a non-physical asset. And and I see that a lot, especially having come from the real estate space that most people that like real estate, like something physical, that if worse comes to worse, you can go lay your hands on it and know that you have a physical property. And not being able to do that with Bitcoin is usually what what gets people turned around and and not really seeing the value. And my cure to that usually is if you’ve ever owned a stock, you probably don’t own anything physical there either. You own a share of essentially a legalized fiction, which is a company, and you’ve probably never laid hands on that company.

And yet you see the value in owning its stock. And so Bitcoin is really similar. It’s a non-physical representation of a store of value that is agreed upon, that is bound by rules bound by, in our case, energy, tons of energy, and even though it’s non-physical, is very closely connected to the value of the physical world. And the second misconception that flows out of that is, well, why does it use so much energy? Why?

That seems like a waste to just dump all this energy into something and not get something back. And to that, I have to say that every good currency or every good wealth storage vehicle takes energy to produce and in some sense is like a battery of economic energy. And in this sense, it’s the most pure form of an energy battery that you could have. And although it does take a lot of energy, that’s not necessarily a bad thing. And in fact, the civilizations in the nations that used the most energy tend to be the richest.

And so if you ever want to develop a wealthy civilization, you actually have to not only find a way to produce energy, but use energy. And our problem in the world today is not that we don’t have enough energy, it’s that most of it goes to waste and it doesn’t have the proper channels to be monetized. So in that sense, Bitcoin mining is this really beautiful solution to not just a monetary problem, but actually an energy and wasted resource problem that we have in the world.

Yoni Schmidt 09:53

Interesting. Do you see a lot of real estate investors now dabbling in this space or coming into this space and, you know, are there tax advantages here, or what would be the benefit for someone who owns a portfolio of homes, right. To say, okay, I’m going to go explore, you know, the world of crypto and Bitcoin.

Beau Turner 10:15

Yeah. So I came from the real estate space. And a lot of our clients come from the real estate space is either an investment source or their primary income stream is being in that space. And part of the reason that mining makes a lot of sense for real estate investors is it’s got a lot of the same tax benefits. So you’ve got a physical asset, a computer, which you can depreciate very quickly, often in five years.

Sometimes if you structure entity well just one year. You also have operating expenses. So you’re paying for hosting, energy, maintenance, whatever it may be. Essentially like you would you would run a business. You’ve got these legitimate operating expenses that are write offs to any sort of income that you produce.

And so in that sense, it’s very unique to just purchasing Bitcoin on the market, because you actually have something physical that you can offset your taxes with. And so that’s the main strategy is if you’re a real estate investor, you’re very familiar with using depreciation to your advantage. And this is not different at all. It’s just a faster depreciation schedule. A computer is a little bit different than a house, but the strategy is the same.

And that’s how we see real estate investors use it.

Yoni Schmidt 11:22

Yeah. And that depreciation I’m guessing is linear over the course of five years. Or do you have to do a cost segregation like you would with a a piece of real estate.

Beau Turner 11:32

So you don’t have to do a cost segregation that makes it a little bit simpler. You don’t have to pay anybody for a cost segregation study. And there’s different ways that you can depreciate it. So there’s there’s a simple straight line depreciation. You can do accelerated depreciation.

You can take bonus depreciation or you can do section 179 where it’s essentially the first first year you’re fully writing off all of your expenses. So depending on how you’ve got your entity structured what makes the most sense for your tax strategy? Not a CPA. So I won’t claim to give anybody advice for their individual situation, but I’ll say that there’s many different ways that you can slice it.

Yoni Schmidt 12:07

Yeah. Wow. And I guess the the question that pops into my mind about, you know, the the value of bitcoin mining versus just going out and buying bitcoin, right. Why would someone come to you and say, okay, let’s go mine for bitcoins versus okay, I have $50,000 in my pocket, why don’t I just go buy some bitcoin and put it in my in my crypto wallet? Right.

Is it oftentimes that much cheaper and the return is that much greater to mine the Bitcoin than it is to actually purchase it?

Beau Turner 12:43

Yeah. So there’s, there’s two main parts of this. And I’ve got a funny analogy. It’s that if you’re buying Bitcoin in the market, it’s sort of like you’re going to the store to buy milk. And one day if there’s a price hike on milk but you still need milk, you’re going to go in and you’re going to pay the market price for that milk.

Versus if you own a cow, you have a natively produced source of milk that regardless of what the market price is, you’ve got milk coming to you every day. And that’s part of why you would choose mining. The more sophisticated way to frame it is if you invest the same amount of capital up front in mining as Bitcoin, as long as you’ve got a three year time horizon or more, you’re likely to end up with more Bitcoin than if you had just gone and bought it on the market. And then the other is that we just discussed those tax advantages. So if you’re just buying Bitcoin on the market that is after tax income there’s no offset at all to that.

If you are a high earner or a business owner and you’ve got a tax liability coming up. You can’t buy Bitcoin to offset it. You can buy miners and pay for electricity to offset it. So even if you produce the same amount of bitcoin mining as just buying, you would still get a benefit by producing it and having it as this kind of operating business structure, rather than buying the asset natively.

Yoni Schmidt 14:00

Yeah. And is it becoming more scarce and harder to mine over time because there is a limited amount of bitcoins out there.

Beau Turner 14:07

It is. So Bitcoin has a fixed supply of 21 million coins. There will never be more than 21 million coins in existence. And of those 21 million, a 19.8 or so have already been mined. And so we’re going down to the last 6% of the supply.

And over the next ten years, five of that 6% will get mined. And that last 1% will take 100 years to finish off. So this is kind of like a Goldilocks period in the mining space of, a lot of reward, a lot of return for comparatively low effort and time. And of course, it would have been nice to figure this out ten years ago as well. At that point, it was really just people who were quite techie doing it on their laptops.

Now we’re using these huge industrial facilities and gigawatts of energy. I mean, the network itself consumes more energy than most mid-sized countries. So it’s it’s quite a robust system at this point. But yeah, I would say that the next ten years are, are this really interesting period where there is still a lot of opportunity to acquire an outsized amount of Bitcoin, especially through mining?

Yoni Schmidt 15:18

Yeah. Interesting. Let’s talk a little bit about passive income and strategy. Right. So how does someone actually get started investing in mining infrastructure through your platform.

And you know how much money do they need.

Beau Turner 15:31

So with us you can start with as little as 8 to $10,000 and get a single unit. We do have clients that just have one unit with us. But the nice part about this model is that it’s really perfectly scalable and modular. So rather than having to go out and find a new and unique real estate deal, every time you’ve got some spare cash or pay a wholesaler for one of their deals, you can actually just buy a single unit or five units or ten units, depending on how much cash you have available. And we have people from a single unit, a 10-K to one of our largest clients, has over 500 units and has spent multiple millions of dollars with us.

So it’s really catered to wherever you’re starting out and the unit economics work out whether you’ve got a single unit or several hundred units. You do have quantity discounts, of course, if you’re getting hundreds of units, those are a little bit cheaper for you, but largely works out the same. And as far as the process, we try to make it as simple as possible. I told you briefly about my runaround story and how bad I had it when I first got into the industry, and it was opaque. It was not transparent, it was clunky.

It took forever. It didn’t work out well, it didn’t make me money. So we’ve set it up to be really simple, where essentially you send a wire, credit card or ACH payment or even a Bitcoin payment for a slight discount because it settles in ten minutes is very fast. And we get you set up within the next few hours or the next few days, depending on how many units you order. If we’ve already got the servers sitting in the facility, it’s as simple as changing over one line of code to start getting you payouts.

But the process on your end, you know, we’re taking care of all the complexity, the technical setup, everything that you don’t want to do and probably don’t know how to do. Well, we’re taking care of that, and our customer service team is doing 1 to 1 onboarding with you, making sure you’ve got a wallet set up, that your custody is set up properly, that your pool is set up properly, and that you can receive payouts as soon as that same day.

Yoni Schmidt 17:27

Yeah. Let’s talk a little bit about the terms that you just mentioned. Wallet pool. Right. Payouts I guess.

Yes. Tell us a little bit about those. Maybe define them so that our listeners can understand. You know what. What does that actually mean?

Beau Turner 17:43

Absolutely. So we’ll start from the wallet, which is just where you store the coins. And wallets take many different forms. I mean, you can have a wallet on your phone, which is comparatively less secure than having, you know, one of these hardware devices or multiple hardware devices where you have to sign with two of these three devices in order to move your funds. So there’s different levels of security, but knowing that this is still a new space to everybody, pretty much most of the world, you don’t necessarily want to go for the most complex technical setup from day one.

And so there’s there’s stages that you can go through. And depending on how much you’re custodying a phone wallet might be fine. It’s only when you get up into those higher dollar amounts or those higher Bitcoin amounts, that it makes a lot of sense to think about your custody more deeply and start going down that complexity ladder. The next term would be that that pool that I mentioned. So the pool is where you get your your Bitcoin rewards paid out.

And the reason for this is early on in the network, you could just literally hook up a laptop and and run the Bitcoin Core software and mind your computer and it would go straight to your wallet. You would win a block, which is this, this little segment of bitcoin that gets mined every ten minutes, just mining on your own. As the network got more competitive and you saw a lot more computing power going towards it, it was much less likely that you would win a block yourself because you’re competing with the rest of the world. And so these machines got way more specialized, and you needed a lot of them to reliably get an income stream. So what came out of that was pools.

Pools are just if you think of a group of people that go and buy lottery tickets together, and when you win, you split the payouts. That’s exactly what a pool is. The pool has a way larger chance of winning that payout, and they can evenly distribute it to the people participating in that pool. So you pay the pool a small fee, usually 1 to 2%. And for that you get more consistency and certainty in your payouts.

So the pool is the vehicle that most people are actually hooking these machines up to. And then once the pool balance, the amount that you’ve mined yourself gets to an appreciable amount, you will withdraw that to your wallet. So that’s your self-custody where you’re actually holding your funds.

Yoni Schmidt 19:56

Which is essentially the payout.

Beau Turner 19:58

Exactly. The pool payout is what goes to your wallet. And that is just the bitcoin that you mind going into your own custody.

Yoni Schmidt 20:05

Got it. Okay. And so how often do you see these payouts occurring. I mean if someone came to you with a with a $50,000 check and said, okay, get me started, I’m ready to rock and roll. What does the turnaround time look like from the moment they give you the check to their first payout?

Beau Turner 20:25

So it could be as short as a day. If you want to take it on that first day, you absolutely can. There’s a little bit of nuance to that, and I hate to confuse people with with too much technicality, but when you take a bunch of transactions, you have to pay a fee every time you send a transaction. And when you combine transactions. So if you think about it logically, it’s or through an analogy would be like having a bunch of pennies in your pocket rather than waiting until someone would pay you a dollar bill.

It’s expensive and slow to move 100 pennies versus a single dollar bill in terms of how efficient that is of a payment method. And so when you’ve got, let’s say, five machines, I would say you could take a weekly payout without that being an issue. If you’ve got one machine, I probably wouldn’t take a payout more frequently than once a month. If you have 100 machines or 500 machines, you could take daily payouts if you want to. But the truth is, there’s no as long as you have trust in your pool, there’s not really any net benefit to taking out daily payouts versus weekly or monthly as long as you don’t have a need for the funds, but they are readily available for you if you would like to withdraw sooner.

Most people are not living off of this. This is a long term investment, so they’re just setting something to essentially auto pay or auto withdraw and letting it stack up in their wallet balance.

Yoni Schmidt 21:47

Interesting. And you know, if you’re investing into a Bitcoin mining operation, is this something that is in perpetuity? Is this something that, you know, someone will, you know, then benefit from the mining for as long as it’s going on and as long as there is Bitcoin to mine? Or is it something that, you know, once you go through the funds that you’ve deposited with, you know, Abundant Mines, you know, you’re done and you’re you’re mining period is over. How does that work?

Beau Turner 22:18

Yeah. So you when you work with us, you actually own the machine that is your machine forever. It lives in our facility and we’re taking care of it. You can think of us as a property manager and an IT services company, but that is your computer, so if you wanted it shipped back to you for any reason, that is. That is all yours and it’s yours to sell as well.

If you would like to sell the computer. But the lifespan of them is typically depending on the climate, you know, anywhere from 5 to 10 years. If you’re mining somewhere like Texas or hotter climate, maybe on the the lower side, like 3 to 5 years in a really great climate like ours in Oregon, you can easily get 6 to 10 years out of it. And so as long as that machine is running, that is yours and it’s producing income for you in terms of the way that that that cost structure works, you would buy a machine from us. That machine is yours.

And then to operate it every month, there’s a monthly expense. This is basically just an all in one hosting fee that covers electricity, spare parts, maintenance, cleaning, upkeep, monitoring, and that is $225 a month. And that $10,000 machine, as we sit today, is making somewhere between 5 and $600 every month. So you’ve got pretty good margins on a monthly basis, about 50% right now.

Yoni Schmidt 23:33

Wow. Yeah, that is great. Tell me, I guess about let’s talk about technology and operations a little bit in terms of the technology. Right. You touched a little bit about, you know, upkeep and maintenance and, you know, the fact that if I were to give you $10,000, I own the machine, you know, and I’m essentially like, I’m paying you rent, right?

Or I’m paying you a management fee, let’s call it to to house this machine and take care of it. How do you keep up with, you know, the changes in technology, the fact that computing power is becoming is increasing over time, right? What’s the is it. There’s a law, right? Is it Moore’s law?

Is that Moore’s law? Moore’s law. Right. Where you know, your computer, your computing power will, you know, double every two years. And if I’m not mistaken.

Beau Turner 24:24

Right. I think it’s 18 months. But you’re you’re right. Roughly every 18 months you should see computing power double.

Yoni Schmidt 24:31

Yeah. How do you keep up with that and ensure that, you know, your clients are getting that you know, the best computing power or the or the strongest computing power? I don’t know what the exact phrase would look like or sound like. And ensure that your operation is, you know, is just like the most efficient.

Beau Turner 24:50

Yeah. So that’s a great question. And it it actually goes back to what I said about this being a little bit of a Goldilocks period where it’s a very unique period of about ten years, where you’re getting a ton of Bitcoin for that, that amount of work that’s being expended. And over that period of time, it’s kind of similar in the way that the chips have been developed and progressed. So in those first few years of the network, you’re right.

You were building a mining machine and within a few years the next one was ten x more efficient and did it ten x better. And so we’ve hit the period now where this industry is, is about 15 years old at this point. The mining industry specifically is a little more than ten years old. And those first years were what you’re describing gains on the the order of magnitude of Moore’s Law, where roughly every 18 months it was getting two times better and you had to keep upgrading your equipment to stay relevant. We’ve started to hit the the sort of plateau or the diminishing returns period where they’re not getting much faster, much quicker.

And so to quantify that from 2016 to about 2020, you would have seen somewhere on the order of a 50 to 100 x increase in efficiency from 2020 to now, sitting here in 2025, it’s been about A3X. And so it’s it’s significantly slowed down in terms of those efficiency gains. And there’s an argument to be made as well that we’ve hit the the sort of bounds of of physical reality where you cannot cram much more density of or chip size into these small containers where if you have circuits too close to one another, then electrons will start interfering and bouncing off one another. So we’re bumping up against the laws of physics in terms of how densely and efficiently we can design these things. And it’s not like a Nvidia GPU, where some clever process can unlock a different way of processing algorithm, and suddenly you’ve got a ten x gain because of some, some clever way of redesigning the way that it works.

This is very much a brute force computer in terms of the computing world. A Bitcoin miner is a very dumb computer. It does essentially trillions of guesses a second and is generating random numbers. There’s no smarter way to generate a bunch of random numbers quickly than to just throw more power and more density at it. And so in that sense, To make a long story short, I would say that the machines that people are buying today are much more likely to be highly relevant for to six, maybe even eight years from now than the ones that they would have bought four years ago.

Yoni Schmidt 27:34

Yeah. So you’re not necessarily going in and changing out components of these machines throughout, you know, someone’s ownership period of those machines? No.

Beau Turner 27:46

When you get a minor, you’re essentially getting a computer that’s going to stay roughly the same for the life of that minor. And the only thing that’s going to change is that you might have a power supply swapped out or a fan swapped out, or some cables, minor components. But the main let’s call it the engine, which is the hash board, the thing that’s doing the work, that’s doing the computation that is going to stay the same. And the next time that you’ll get a hash board upgrade is just buying a new minor.

Yoni Schmidt 28:14

Got it. Interesting. And those those are you’re saying they’re pretty consistent. They stay the same? Or do those hash boards also get upgrades over over time?

Over every 2 or 3 years you’re seeing, you know, new boards come out with, you know, I don’t know, better better solutions or, or whatever the technical term is.

Beau Turner 28:36

Yeah, they they are also going through iterations. It’s kind of like those early years. They tried a few different models and a few different formats of designing a hash board. And now you see most of them are roughly the same. There are some design changes that they go through.

And that’s part of why you don’t just, like, change out a nicer hash board and put it in an old miner. They’ll often change the whole layout, sort of like when you see a major update to a car. It’s not only a different body, but they’ve changed quite a bit internally so that the parts are not necessarily interchangeable from year to year. And so it’s the same thing with this. They’re changing hash boards, they’re changing power supplies.

They’re changing the way that that the infrastructure is hooked up. Kind of like Apple likes to change their plugs seemingly every few years. Miners are the same way where we might build a data center. In fact, we did build a data center in 2023, and by 2025, we had to go through and completely retrofit it because the manufacturers decided to change their plug type.

Yoni Schmidt 29:36

Wow, that’s that’s crazy. Let’s talk about like practical applications for investors who are looking to do this. I’m a real estate investor. Got cash flowing, properties making a decent return. You know, sometimes anywhere between you know, in today’s environment, in today’s economic environment, you’re, you know, lucky if you’re making 7 or 8%, you know, 2020, 2021, 2022, you know, real estate investors were making 12, 15, 18, 20% on their on their investments.

You know, someone who has some some cash in their pocket, they want to come to you and to Abundant Mines. They say, okay, let’s get this going. Right. Let’s talk about the practical implications from a tax perspective. What kind of what kind of, I guess, you know, understanding do the do do do these investors CPAs have to have to file your taxes.

I mean, does this come to you on a K-1? Is it I’m just not very familiar. Or is it just like, you know, my Vanguard account or my Merrill Lynch account where I get an annual statement at the end of the year? Here’s my 1099. You know, I give it to my CPA and she just runs with it.

Beau Turner 30:54

Yeah. So from a practical standpoint, when you’re we talked about pools earlier, any good pool is going to produce a report for you at the end of the year that essentially tells you everything that you made, what your cost basis was. You’ve got all of the the bills that you paid in terms of of buying the machine as well as any operating costs. So your monthly hosting fees. But you’ll find that this is not too complicated for CPAs.

Once they get their hands around around how it actually operates, it’s no different than a standard business model. And if there is any gap, we do have several tax professionals that we consistently refer people to who do a great job of, even if you just need them for a quick consult of how to treat it can be really helpful. You don’t necessarily need to transfer all of your business activities over to a new CPA, but it is helpful to have some advice from people who are not only advising their clients on this, but doing this themselves, but on a on an operating basis. It’s very simple. You just have to pull a report once a year, give it to your CPA.

You can tell them what is earned income, which ones are operating expenses and offsets the value of that computer. Depending on what depreciation schedule you select, you know you’re you’re letting them know how much you paid for it, and they’re determining how much of that to write off in year one or year two through five. And that’s that’s pretty much it. You know, once you earn the bitcoin that is treated as earned income. And so this this is something to know is that currently we’re still waiting for the IRS to kind of fix this because this isn’t how it applies to like a gold miner, a gold miner doesn’t get taxed the second that they mine the gold and pull it out of the ground, they get taxed when they sell it.

Currently, Bitcoin miners are facing double taxation where you get taxed when you mine the bitcoin and then again when you sell it. So right now let’s say you you mine a coin a full coin for 100 K. You’ve got a $100,000 of taxable income. That has to be offset by your depreciation and your operating expenses. And then if you hold on to that coin, then it appreciates to 200,000.

If you sell it at 200 you’ve got a capital gain that you have to pay. Then on that $100,000 gain. So you’ve got both earned income taxation and then capital gains taxation. We would expect that to be fixed within the next few years, especially considering the administration really loves this industry. And even the Trump boys are currently involved in a Bitcoin mining venture on a pretty large scale, so I would expect that this is a priority for them to to help fix, but that is the way that it currently works.

Yoni Schmidt 33:36

Interesting. And okay, so back to, you know, the the example that you just gave of, you know, you mined one Bitcoin for $100,000, which would mean that you need to buy, you know, ten of those units and ten of those computers. Is that kind of how the math tracks or am I off.

Beau Turner 33:56

You’re you’re pretty close. So it’s to mine one bitcoin a year. You need to get somewhere between 20 and 25 units. So that’s an initial spend of about 200 to 250,000. And then you’re looking at electrical expenses of about 70,000 for that first year.

Right now, a little under that like 65. So you are you are looking at quite a few machines to make sure that you can mine a bitcoin per year.

Yoni Schmidt 34:24

Yeah. Wow. So it’s about $2,500 per year per computer. In terms of just electrical costs. There’s a $225 monthly fee.

Or is it 275.

Beau Turner 34:36

225 is that all in monthly fee?

Yoni Schmidt 34:38

225 yeah. So what could someone expect for to as their total operating expenses when they’re buying at least one machine.

Beau Turner 34:49

So your total all in expense is going to be that $10,000 for that computer upfront. And then that first year of hosting will be about $2,700. And you would expect that computer in that first year to make you somewhere between 5 and $6000 worth of Bitcoin, or 5 or 6% of a Bitcoin. If you see Bitcoin at 200 K, then you know your investments paid itself off within that first year and years where Bitcoin is flat, there’s no price appreciation whatsoever. You’d expect more like a 20 to 30% return.

Yoni Schmidt 35:19

Yeah. Wow. Let’s talk about looking ahead. What’s next for Abundant Mines expansion, innovation. Something that we should be on the lookout for.

Beau Turner 35:32

Yeah. So we are rapidly expanding in terms of building and acquiring new data centers. Right now we’re just in Oregon, and we have plenty of opportunity in Oregon to develop and acquire more capacity. But ultimately, our mission is to lower the cost of energy for the entire Pacific Northwest. And so we haven’t gone into this rabbit hole yet, but I think of bitcoin mining as the most effective, cost effective and flexible energy management resource that we have available to us.

In many ways, it acts like a battery, but it’s always wanting energy, but is always willing to give it back or give back that capacity to moment’s notice. So our our mission is build as many of these energy management resources around the Pacific Northwest as possible, become the largest grid balancing resource in the Pacific Northwest, and then start giving capacity back at key points of the year. And this this could be a two hour podcast on its own just describing how this works. But essentially energy for a couple of periods of the year in the dead of winter and the heat of summer gets extremely expensive and there’s a lot of demand for it. And what you’ll find is that most consumers on the grid are not flexible consumers.

They’re not willing to turn off their energy usage at a moment’s notice. And you’ll see this with traditional data centers and AI facilities. They are not willing to cut off. What they do is too valuable, and they need basically 100% uptime in order to make their business model work. And so you find these these periods of strain on the grid that not only results in a lack of energy available, but what is available is extremely expensive.

So what we do is for these key periods of the year, like 1 to 5% of the actual hours in the year we are cutting off, and that’s avoiding 10 to 15% of all of the energy costs that an entire region would pay. And so that’s our main goal is to spread that around, get that into as many communities as possible and actually make them far better energy buyers and by default, make the energy management portfolio of the entire region much more efficient and effective.

Yoni Schmidt 37:45

Interesting. And so you would become a basically a producer of energy that you would sell back into the grid.

Beau Turner 37:55

So this is a it’s a it’s a great question answer because we don’t technically generate energy. We’re consuming energy.

Yoni Schmidt 38:03

Yeah.

Beau Turner 38:03

But in terms of how the grid sees an energy resource. Whether you add a megawatt of generation or you subtract a megawatt of demand, it does exactly the same thing for the grid. So what we’re doing is instead of making the grid pay for like a fossil fuel or fossil fuel powered peaker plant, which is essentially one of these emergency resources that rarely ever gets used, but when it does get used, cost a huge amount like 100 or 200 times more than your standard energy rate to turn on. Instead of paying 100 times more for that to turn on, they are paying us like 5 or 10 times more to turn off. And that does exactly the same thing for the grid, and it’s way cheaper for the grid, and also helps us offset costs for our customers and give them the lowest energy rates possible.

Yoni Schmidt 38:54

Yeah. Interesting. Well, finally, you know, what advice would you give someone who’s sitting on the sidelines interested in Bitcoin mining. But you know they’re unsure how to start?

Beau Turner 39:05

I would say start small because it’s it’s hard to really be motivated to learn about something until you’ve got a little bit of skin in the game. So whether that’s buying $1,000 worth of Bitcoin or buying a single miner for ten K and coming out to visit it and see the site. I think a huge part of the return of this space is not just the financial return, but the return on your education and investing in your own ability to discern. How. Is the investment landscape going to change over the next decade?

How is the world going to change over the next decade? And we sit at this really interesting intersection between the energy world, the data center world, the monetary world where you can learn a lot about every one of those aspects of society just by powering on a Bitcoin miner and seeing how that works. And I think that it’s a mistake for people to ignore the space, even if you’re skeptical and cautious. I think hedging your bets with 1 to 5% of your portfolio is smart. And if you’re like me and you, you do your homework and do your thousand hours and probably now closer to to 4 or 5000 hours of of research and work, you might have it take up quite a bit more of your portfolio.

If you’re on my level. It might be 90% or more of your portfolio that you put into this space.

Yoni Schmidt 40:23

Yeah. Awesome. Well, hey, thank you so much for educating me about Bitcoin mining and the world of cryptocurrencies. And we’ll put your website down below if anyone is interested in reaching out to Abundant Mines. Really appreciate you coming on the show and teaching us a little bit about this.

Beau Turner 40:46

Thank you for having me on Yanni. It was really fun.

Yoni Schmidt 40:48

Yeah. Appreciate it.

Outro 40:53

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