Company leaders of a relatively new Rochester-based firm in the cryptocurrency mining space believe the region is poised for growth in the industry.
“Rochester has a competitive advantage and is a great place to mine,” said Foundry CEO Mike Colyer.
Foundry offers institutional expertise, capital and market intelligence to digital asset miners and manufacturers, providing them with the resources to build, maintain and secure decentralized networks.
The firm is focused on partnering with others in the mining and staking industry with the goal of creating greater access to digital asset mining, decentralizing geographic opportunity and bringing more legitimacy and transparency to the bitcoin mining ecosystem, particularly in North America.
Foundry offers three services for the mining ecosystem: equipment financing and procurement; mining and staking; and consulting and advisory services.
In addition, the business works with energy companies and governments to help formulate and execute their mining strategies.
Since its inception in 2019, Foundry has become one of the largest bitcoin miners in North America. It has also extended equipment financing to other mining organizations and helped to procure approximately half of the bitcoin mining equipment delivered in North America this year, company leaders said.
Foundry is a wholly owned subsidiary of Digital Currency Group, a New York City-based enterprise that builds, buys and invests in blockchain companies.
DCG has committed to invest more than $100 million into Foundry through 2021.
Barry Silbert, DCG’s founder and CEO, said Foundry is instrumental in the firm’s mission to accelerate the development of a better financial system, noting digital asset mining and staking is the backbone of blockchain technology.
“Foundry is bringing critical resources and guidance to an essential corner of the industry, and Mike Colyer and his team have the expertise, credibility and integrity to support the evolving needs of miners and manufacturers,” Silbert said in a statement.
Colyer started researching the industry around 2017 and took an immediate interest. He compared it to the start of the Internet and the impact that technology had on society.
“Something with that impact doesn’t happen often in a lifetime,” Colyer said.
After extensive research, Colyer connected most with the mining side of the industry.
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain. It is also the means through which new bitcoin are released.
A blockchain is a cryptographically secured, universal, open-source and decentralized ledger for keeping track of transactions. Each of the blocks of data is secured and bound to each other using cryptographic principles.
Bitcoin uses this model for monetary transactions, though other technologies using blockchain employ mining.
Colyer noted the industry is relatively young — starting some 11 years ago — but he believes companies in various industries will soon see how blockchain can help their businesses.
“Blockchain fixes a lot of problems that can’t be fixed with current technology,” Colyer said, adding it has the potential to be a new and more effective way to connect globally.
Colyer previously led business development at Core Scientific, a cryptocurrency hosting company.
He was also the president and chief operating officer of Savage IO, a Fairport-based cryptocurrency mining company, where he continues to serve as a board member.
Before his pivot into the crypto industry, Colyer was an operational and commercial executive for manufacturing and distribution firms for more than two decades, often serving at the behest of private-equity backers.
For the past year, he has been focused on establishing, and growing, Foundry.
The business went from Colyer as the sole employee initially to a workforce of 10. He expects that number to double in the next six months.
Foundry is focused now on expanding its technology team and is looking for software and network engineers. It would be ideal if they had a passion for the industry, although it is not required, Colyer said.
He believes once you enter the industry, it is hard to find a reason to leave.
“It moves so fast and there’s so much happening,” Colyer said. “It’s exciting to be a part of such an industry.”
Rochester is an ideal location for the industry because of its universities and talented workforce, he said.
The region also has ample access to low cost hydropower, which can greatly reduce costs when it comes to digital asset mining.
Having the backing of DCG could also be advantageous for the region, given its industry reach, he said.
In addition to Foundry, DCG is the parent company of Grayscale Investments, the largest asset manager in the digital currency industry; Genesis, the world’s first full-service digital currency prime broker, and CoinDesk, the leading blockchain industry media and events company. DCG is also an investor in more than 160 companies around the world.
“It’s cool that a company like DCG is investing in a company in Rochester,” Colyer said. “It could be a pivotal moment if we take advantage of it.”
Andrea Deckert is a Rochester-area freelance writer."