Why This Miner Refuses to Pivot to AI w/ Raphael Zagury

🔗 GUEST LINKS

- Raphael Zagury (LinkedIn): https://www.linkedin.com/in/rzagury/

- Elektron Energy: https://elektronenergy.io/

- Twitter/X: @alphazeta ("Here Be Dragons" & monthly mining reports)

🛠 SPONSORED BY

- Luxor – Mining software, firmware & hashrate tools

https://luxor.tech/

- Altair Technology – ASIC hardware, replacement parts & mining infrastructure

Code: HASHRATEUP

https://altairtech.io/aff/125/

📄 OVERVIEW

Everyone's leaving Bitcoin mining for AI. Raphael Zagury — co-founder & CEO of Elektron Energy, one of the largest private Bitcoin miners in the world — explains why they're doing the exact opposite.

We break down the first-ever hash rate bear market: why this cycle feels different, why hash rate has been grinding down since October (not crashing like the China ban), and what happens when 60-70% of machines get wiped out at the next hashprice halving. Raphael makes the contrarian case that right now is one of the best times ever to start mining — if you can survive on the left side of the cost curve.

We also get into why Elektron refuses to pivot to AI/HPC, how they pitch mining to institutions like Fidelity, the self-correcting mechanism in hashprice, and why stranded energy in Brazil and Africa is the real opportunity nobody's pricing in.

⏱ TIMESTAMPS

0:00 – Intro

0:47 – World Cup, bear markets & Bitcoin cycles

2:49 – The first-ever hash rate bear market explained

3:36 – How this affects one of the largest private miners

3:53 – Why this isn't the China ban (gradual grind vs sharp drop)

5:33 – Why miners are fleeing to AI/HPC

6:50 – Why Elektron sees this as an opportunity

8:19 – The risks in AI/HPC nobody is pricing

9:05 – Pitching mining to Fidelity & institutions

9:30 – Unit economics: mining is still profitable

10:32 – Cost curve & the self-correcting mechanism

11:14 – What happens when 60-70% of machines shut off

13:02 – Why institutions love contrarian miners

14:37 – The AI pivot & hash rate on the way back up

16:32 – When does mining beat just buying Bitcoin?

19:08 – Why this story is so hard to tell investors

20:25 – Market share, path dependency & hash rate dynamics

22:20 – Why now is one of the best times to start mining

22:45 – Capital & capital structure in mining

23:40 – Why the AI boom will boom and bust

24:19 – Building the optionality stack around energy

25:17 – Why AI/HPC innovation is still dangerously early

28:34 – electronics.dev: open-sourcing mining research

30:29 – The efficiency curve (log scale) explained

31:50 – Predicting the S23s with a regression line

32:14 – Why efficiency gains are about to flatten

32:42 – Network composition: S19s, S21s, S23s

33:38 – Machine-by-machine break-evens & cost to mine

34:58 – What a hashprice halving does to the network

36:11 – Summer heat & temperature-sensitive machines

36:36 – The shareholder-money era & underwater machines

40:17 – Stranded energy: wind in Brazil, curtailment credits

42:19 – Bitcoin's only customer is the protocol

42:39 – Old S19s at $30: 6-month ROI vs 10-year energy ROI

43:11 – Why Raphael is bullish on mining in Africa

47:28 – Speaking the language of energy & TradFi

48:08 – Batteries vs miners: a tenth of the capex

49:54 – "Buyers of last resort, sellers of first resort"

50:47 – RAPID FIRE: hashprice bottom, recycling, security & Brazil

📊 KEY TOPICS

- The first hash rate bear market — gradual grind vs the China ban shock

- Why 60-70% of machines could turn off at the next hashprice halving

- The self-correcting mechanism in hashprice and the cost curve

- Why Elektron refuses to pivot to AI/HPC (and the mispriced risks)

- When mining beats simply buying Bitcoin

- The efficiency curve flattening as R&D dries up

- Stranded energy, curtailment & why Bitcoin is the most flexible load ever invented

🔗 RESOURCES

📊 HashrateUp Hardware Deals: https://t.me/hashrateup

📩 Free 5-Day Bitcoin Mining Course: https://hashrateup.com/newsletter-sign-up/

#BitcoinMining #HashRate #BearMarket #BitcoinVsAI #Mining #Elektron