Who would've thought that Bitcoin mining would still be a thing? After all, the rewards for miners are down to 12.5 Bitcoins, and it's scheduled to decline even further by May 2020 to 6.25. But for San Fransisco-based Layer1, the goal is to become the biggest Bitcoin miner in the world -- and not even China can stop them.

On Tuesday, after raising the necessary funds from Peter Thiel, Shasta Ventures and other undisclosed crypto investors that amounted to $50 million, the startup is forging ahead with its ambitious goal.  

The mining facility that lies 150 miles west of Midland Texas will consist of a power sub-station with sources of cheaper energy, solar and wind, produced by other Texas facilities.

The company is also developing a cooling system for the chips used for mining Bitcoin so that they can sustain their operation in the midst of extreme heat.

Co-founder Alexander Liegl told Fortune that Layer1 wants to control all the aspects of mining from chip and electricity production to cooling. Their longer-term goal is for their facilities to become a global hub for other cryptocurrencies.

"We expect our chips to be competitive for at least eight years now...you want to have your own chips in hand. We also have our own electricity substations: effectively that's as close you can get to owning your own power plant," said Liegl.

In 2018, Layer1 had no plans of pursuing mining operations, and Liegl even described the company as an "activist fund for cryptocurrencies." Liegl said that they would invest in protocol development, such as the Grin project, but all that changed this year.

"From an ideological perspective, for Bitcoin to grow into its multi-trillion potential, it needs a U.S. company to lead," says Liegl. "This ideology resonates with Peter [Thiel] and our other investors."

Bitcoin mining's predominant player is China and is led by Beijing-based Bitmain. However, due to the financial troubles of Bitmain, Layer1 sees an opening to take over. And with China expressing that it wants to ban Bitcoin mining and plans to launch a cryptocurrency of its own that aims to curb demand for other crypto-assets, Layer1 could indeed become the world's biggest Bitcoin miner.

Crypto currencies, despite regulatory grey areas, have been gradually making inroads into commerce in recent years with bitcoin leading the way Crypto currencies, despite regulatory grey areas, have been gradually making inroads into commerce in recent years with bitcoin leading the way Photo: AFP / Justin TALLIS