On a corner of prime Williamsburg in Brooklyn, there’s a New Age-y bathhouse where people soak in hot tubs, plunge in cold ones, and drape their languid bodies across sauna and hammam benches.

Upstairs, guests wearing robes sit on a heated patio and order Wagyu skewers and house-made vodka infusions. It’s luxury of the old-world variety, which makes it surprising to learn that in the bowels of this trendy day spa, co-owner Jason Goodman is running a bitcoin mine.

If you’re familiar with bitcoin mining—or even if you’ve just seen a photo of a mine, typically a warehouse sprawled across tens of thousands of square feet and filled with shelves of ASIC computers and fans stacked to the heavens — you might wonder how this is even possible. Turns out, bitcoin mining isn’t the sole province of large-scale blockchain companies. Some enterprises are small — like hidden-in-a-closet small. “Any building that requires energy — which is every building — can be used for this,” says Goodman, who belongs to a widely distributed network of “home miners,” or not-industrial-scale miners that have set up shop in unexpected places (including a ... volcano.) Since he launched the operation in 2022, the pools in his spa are heated by 12 computers that run around the clock, verifying bitcoin transactions and earning a little bitcoin in return. Good- man recalls the day they first switched the system over from the original heaters to the mining system. “We did it live; there was no shutting down the bathhouse.” Even though he knew it would work, he says he was glued to the floor in the pump room, heart racing. “I was staring at the temperature display, going, Oh my God, I lost a degree. Oh wait, coming back up,” he says. “It does feel a little like magic, because they’re just computers and they’re heating our pools.” Here, Goodman explains exactly how his whole operation works, and why it’s an eco-friendly way to mine bitcoin.

For a spa owner, you must be constantly explaining how bitcoin mining works. What’s your trick for breaking it down?

I tell people that the miners are like bitcoin’s military. If you have something of tremendous value, it needs to be defended. The U.S. dollar also has an army, but it’s a real army with guns. Gold requires huge vaults to defend it. This is a more peace- ful defense, where all the miners work in aggregate to run algorithms and solve puzzles that actually make blocks in the blockchain. The miners — the army — create an enormous wall of computing power around the Bitcoin Network, so that no- body can climb over it. That’s why nobody’s ever successfully attacked the Bitcoin blockchain. When Satoshi Nakamoto in- vented bitcoin, they designed it for an adversarial environment. They knew that if it worked, then people would try to hack it. So there was a question around how we could make bitcoin im- penetrable to attacks, but still decentralized, so there’s nobody in control. Anybody can join this army. Anybody can do this in their house.

And Bathhouse has enlisted in this army?

We’re contributing a few soldiers to the army, and we’re getting our little share of bitcoin out of it in return.

What gave you the idea? Are you a crypto guy?

I’m not a trader. I don’t want to try and figure out how to be good at that. I’m more of a tinkerer who likes to build things. But in 2020, during the early part of the pandemic, I became very concerned about huge inflation. It was very obvious what was going to happen: The government was going to print more money, so monetary inflation would occur. I started wondering, how am I going to protect myself from inflation, and how bad is it going to get? I started looking into bitcoin. Not to flip it, just to understand how mining works and how decentralization works.

Then I came across a podcast from this guy named Marty Bent, who worked with a company called Great American Mining. They basically show up at oil fields, where there are chimneys with flames coming out, burning off natural gas. These flares coming off the chimney are wasted energy. Bent hooks up a generator and just runs bitcoin miners right there with wasted energy. That really opened up my eyes, because energy is used and energy is wasted. Whether you like it or don’t like it, the economies of the world depend on oil and that oil is going to be drilled and that flare gas is going to be flared. But what Bent showed is that you can capture that energy and do something with it.

Which is a big deal, because one of the central concerns around bitcoin mining is how much it contributes to greenhouse gas emissions.

Right, so if you can take something that is waste and turn it into something that can create value, it’s such a huge win. It takes real engineering, and those guys had to go make those relation- ships at the oil fields, and then actually show up and operate it. I was very impressed. Then I started thinking: I spend 99 percent of my time running a bathhouse, and we have to buy energy to keep the spa running. It takes energy to make pools hot. We have two heated pools at the Williamsburg location, and I have 18,000 watt electric heaters on both of them. If I can run miners using the same wattage, I already know that miners produce heat as a waste product. They take electricity, send electrons across their circuit boards, mine bitcoin with it, and then that energy gets turned directly into heat. So if I could capture that heat and channel it into the pools, I would be using the same amount of energy as before, and I would also be mining bitcoin.

It sounds like a great idea in theory. How did you know it would actually work?

I ran a test, and bought two miners and put them in an immersion tank filled with dielectric fluid, which is like an engineered mineral oil that cannot conduct electricity. You could drop a toaster oven in one and then stick your hand in the fluid. Then I used an indirect hot-water heater that’s lined with a copper coil that has hot oil flowing through it. The water fills the tank, and the copper coil heats the water. All I did was turn the miners on, and I got a lot of hot water. Once I proved that it would work, and that I wasn’t losing heat or energy in the process, I said, okay, I have two pools I want to heat, and they each need 18,000-watts. The miners are 3,200-watt devices, so I bought 12 of them, set them up, and the energy from those devices transfers to the heat exchangers for the pools.

Now that the miners have been up and running for about a year, how does this change your business? Are you fund- ing the new bathhouse with bitcoin?

No, we’re a really small-scale operation. Our holdings aren’t nearly big enough to do that. I’m doing this because we can, and because it helps us recover our energy costs. The energy I was already going to buy, I’m now getting some portion of that back in bitcoin holdings. Also, I believe that bitcoin is good for the world and for our society. The more small- and medium-scale miners there are, the more decentralized and distributed the Bitcoin Network becomes. Then bitcoin itself becomes more robust.

And the people who come to Bathhouse, do they know the water is heated through bitcoin transactions?

No, but people never knew how the pools were heated in the first place. They’re not thinking about it. I mean, I wouldn’t go to a spa and think about how the pool is heated. And you can’t see any of the mining at work. The computers live in the back of our office. I have two tanks, and the tanks connect to a heat exchanger that connects to the pool’s plumbing. The chlorinated pool water pumps through one loop, and the water that comes out of the heat exchanger from the bitcoin miner pumps through another loop. The water does not mix. Imagine a pipe inside a pipe.

So people aren’t bathing in bitcoin water?

Nope. It will not turn you orange.