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What we do at MX3 CS is find new ways to generate passive income from machines. In theory, any machine that generates value can be monetised by our magic machine monetising technology — MX3 Atom. Essentially MX3 Atom is a digital wallet and blockchain smart meter combined. It can be used with any currency to generate revenue from machine-based activities. Some examples include distance traveled, weight of material moved, depth of hole drilled, length of trench dug, or amount of energy consumed. All MX3 Atom needs to know is where to send the money and how much to charge for the task being done by the machine. MX3 Atom can be used to monetise almost any kind of machine asset. Machine payments are processed automatically at the point of service delivery, so no need for manual invoicing, currency conversion, or bank transfers.
Our pre-Covid go-to-market strategy was to target vehicle and machinery OEMs in heavy industry verticals like oil and gas, mining, and construction. However, due to travel constraints, we decided to focus on opportunities closer to home; specifically crypto-mining machines. My recent post “Crypto-Mining is Good for the Economy and the Environment” explains our rationale for targetting this nascent vertical and provides a pretty good overview of how the industry operates.
One of the most attractive things about the crypto-mining sector is that they don’t need to be educated about blockchain and crypto-currency (crypto). This has made finding test partners and potential customers much easier. Before the pivot, we struggled to communicate the benefits of using blockchain to potential customers — they simply weren’t ready for the brave new world of decentralised blockchain finance (DeFi). Hopefully, they will become more amenable in time. Having discovered this new market of highly receptive potential customers we decided that the lowest hanging fruit would be to use MX3 Atom to automate payments for crypto-mining energy consumption.
For the uninitiated, the way crypto-miners generate revenue is by converting energy into money. It’s that simple! They do this by operating specialist hardware that contains processors that solve random puzzles to win payouts. The more processing power they deploy, the more electricity they will consume but the more crypto they are likely to win — or mine using the correct vernacular. Crypto earned from mining can either be put into cold storage and left to appreciate over time or sold for fiat currency via crypto-exchanges such as Coinbase.
Being close to a reliable source of low-cost energy is, therefore, mission-critical. Some of the most attractive countries to setup crypto-mining operations today include North America, China, Iceland, Georgia, and Russia.
As Europe does not have an abundance of energy-rich resources it has never been a particularly attractive location. However, that could change for one small island nation. The UK has the potential to harvest over 50% of Europe’s entire wind production capacity. The British Prime Minister recently announced that he wants to make it “the Saudi Arabia of wind power” and plans to increase capacity to 40GWs by 2030.
The problem is that since his announcement demand for clean energy has fallen sharply as a result of Covid-19. There is, therefore, no longer a supply shortage. Quite the opposite. A recent report stated that last year 3.6TWh of wind power was wasted in the UK — that’s enough to power a million British homes for a year! It forecasts that wind curtailments in the UK will cost British consumers over £1 billion per year by 2025 if Boris Johnson is to meet his wind-powered objectives.
The report went on to say that if 20GWh of battery storage was installed across the country, the amount of wind power wasted annually could be reduced by up to 50%. We believe that a far better solution — that is available today - is to sell excess energy to crypto-miners to avoid the substantial costs of battery installation while also doing away with constraint payments.
For this reason, we plan to deploy a fleet of Mobile Crypto-Mining Units (MCMUs) across the country (see image below) and hope others will do the same. The money generated by a fledging crypto-mining industry would be good for the UK economy and reduce energy bills by billions of pounds.
We are working with test partners in The Scottish Borders where huge quantities of wind power are generated (see report below of a recent site inspection).
With regards to where we are with the development of MX3 Atom, the dev team has created a very basic proof-of-concept using off-the-shelf components and open-source code (see image below).
Test rigs (to simulate MCMUs) similar to the one below have already been assembled by the team and will be transported via van to several test sites where they will start to consume wind energy to mine crypto. The BTC earned by the company will be converted into GBP and paid to each test partner. In addition to wind, we are also in contact with the operators of local hydro, geothermal, and biomass plants.
Each prototype MCMU will be scaled up to the size of a shipping container that can be transported by flat-bed truck (see image below).
The POC has been funded with the proceeds from a very modest SEIS funding round that was closed in Feb 2020. We plan to close a second larger round soon, which will enable us to move from POC stage to full commercial deployment.
The POC currently uses two IOTA machine wallets to simulate financial transactions between the energy buyer (crypto-miner) and energy provider (energy producer). However, we wish to remain token/blockchain agnostic. Our ethos and culture are strongly rooted in the philosophy of Web 3.0; decentralised, distributed, and open. We are particularly active within the Ethereum, IOTA, and Cardano communities but continue to keep an eye on other tokens and blockchain protocols.
MX3 Atom monitors how much energy is being consumed by the crypto-miner in real-time and automatically calculates how much MIOTA each watt is worth. MIOTA is transferred from the crypto-miner’s wallet and then converted into GBP stable coins. Funds are then transferred to the energy provider’s UK bank account in the normal way.
Here is a version of the MX3 Atom POC using the Railsbank payments API: https://youtu.be/F_eWC0h0eZo
Here are two screen captures of the MX3 Atom IOTA POC:
We plan to offer other MCMU operators a way to find the cheapest sources of intermittent energy in real-time. This will enable them to arrives on-site and plugin and use MX3 Atom to take care of the invoicing, billing, and crypto-fiat money conversion. As far as energy providers are concerned they won’t need to interact with crypto at any point. They will simply receive “free money” for energy that would otherwise have been wasted.
MX3 Atom MCMU animation: https://youtu.be/M8DteK_oM9I
