TFTC: A Bitcoin Podcast
Episode: From Blackstone to Bitcoin Mining | Sean Milmoe, Center of Hash E009
Host: Marty Bent
Guest: Sean Milmoe, Center of Hash/360 Energy
Date: September 23, 2025
Overview
In this episode, Marty Bent sits down with Sean Milmoe, co-founder of 360 Energy and Center of Hash, to discuss his transition from high finance in the oil and gas sector at Blackstone to pioneering bitcoin mining operations with natural gas. The conversation explores structural parallels between energy and bitcoin mining, the challenges and economics of renewable projects, and how the culture of oil and gas operators intersects with bitcoin mining as a solution for stranded energy.
Key Discussion Points & Insights
1. Sean’s Background: From Oil & Gas Finance to Bitcoin
- Wall Street Experience:
- Started as an analyst at Credit Suisse (2016–2018), then to Blackstone’s GSO (now Blackstone Credit).
- Investment focus: upstream and midstream oil & gas, often structuring credit and preferred equity deals.
- Learned intense diligence and high standards working with LP capital.
- Investment Dynamics:
- Deals ranged from $100M term loans for private companies to a $1.6B preferred equity deal with Targa Badlands (05:19).
- COVID-19 changed industry dynamics: oil prices crashed, leading to group pivots from oil/gas to “sustainable resources” (07:00).
- Growing disillusionment with renewables financing due to compressed, unattractive returns and LP demand for ESG/green assets (07:25).
Quote:
"We actually rebranded the group from energy to sustainable resources and started doing new originations on more energy transition and related companies... But quickly became fairly jaded, frankly, with the whole renewable craze. I think it was overhyped. The asset returns were just not attractive, frankly."
— Sean (07:10)
2. Discovering Bitcoin: Macro Instability and the Path to Mining
- Initial Exposure:
- First bought bitcoin in 2016 on a friend’s advice but didn’t understand it.
- 2020's money printing during COVID was the real catalyst. Realized the implications of fiat debasement; began to actively learn about bitcoin.
- Used Marty's podcast and reading “The Bitcoin Standard” to deepen understanding (10:55).
- Connecting Energy, Finance, and Bitcoin:
- Dissatisfaction with the effort to create alpha in legacy finance while central banks “just print money.”
- Realized bitcoin’s fixed supply changes the investment calculus.
Quotes:
"Someone can print money with the push of a button. So once you learn about Bitcoin and you ingrain in your head there's only 21 million...it really changes the way I thought about it."
— Sean (16:25)
"It's easier to just go hold an asset that can't be debased."
— Sean (16:40)
3. The Genesis of 360 Energy & the Bitcoin Mining Pivot
- Mining Opportunity:
- Chris, Sean’s co-founder, reached out with an idea: leverage cheap natural gas for bitcoin mining (17:21). Initial skepticism, but Blackstone's own look at a similar Crusoe Energy deal was eye-opening.
- Found niche in buying unattractive older wells (terminal decline, dry gas), using gas for on-site bitcoin mining instead of low-margin pipeline sales (24:09). Eliminates midstream fees, fixes power costs over 30 years.
- Comparative Return Profiles:
- Renewable project equity returns often below 7% and reliant on 15-25 year power price forecasts.
- Bitcoin mining (especially off-grid with owned natural gas) has much higher, shorter payback potential but with commodity (bitcoin) price risk.
Quote:
"The equity returns at that point in time...were still like 6, 7% on these [renewables] deals. And that just seemed crazy to me. And then you look at the bitcoin mining economics at the time, you were making $40 in MCF and making year paybacks on your infrastructure."
— Sean (21:00)
4. Parallels Between Oil & Gas and Bitcoin Mining
- Low-Cost Producer Dynamic:
- In both industries, low cost determines resilience during price downturns (26:50).
- Bitcoin mining and oil/gas both face extreme commodity price volatility; shutting in unprofitable operations is common.
- Asset Valuation/Structuring:
- Bitcoin mining can transform the economics of “unattractive” gas wells: eliminate midstream fees ($0.80/MCF), higher revenue via mining instead of grid sales (35:37).
- Models on strip pricing for gas, then overlay mining revenue for asset bidding.
Quote:
"It's very comparable. The lowest cost producer is going to be able to weather the fluctuations of bitcoin...Same thing applies to bitcoin mining."
— Sean (26:50)
5. Service Model Evolution & Incentive Structures
- From Asset Owner to Oilfield Service:
- 360 started by buying and mining own gas wells, shifted to servicing other producers as bitcoin mining infrastructure operator (50:27).
- Offers two models:
- Purchase Model: Oil producers buy and own the mining infrastructure, 360 builds/operates for a fee.
- Rental Model: 360 owns equipment, producer pays fixed rental; most appeal for larger legacy oil/gas companies used to renting.
- Avoids simply buying gas, as incentives break down (operators won’t prioritize uptime for de minimis gas payments).
Quote:
"The incentives break down because the upstream producer...doesn't care about the $0.25/MCF... If they have any operational issues, they will shut off the gas in a second."
— Sean (53:14)
6. Industry Perceptions & Adoption Barriers
- Bitcoin Skepticism:
- Stigma is declining but still present (50–60% nonstarter recently, down to ~20–30% now).
- Framing mining as an oilfield infrastructure solution—not a bitcoin play—is key (56:02).
- Early Adopters Driving Change:
- “Wildcatters” and smaller private operators more risk-tolerant and likely to try mining; larger public companies are more cautious due to institutional inertia and credit relationships.
- Success stories create snowball effect—oil/gas is a copycat industry.
Quote:
"It really is a copycat industry that might be slow to adopt things at first, but once something's working, people do it."
— Sean (68:00)
7. Financing Constraints in Oil, Gas, and Bitcoin Mining
- Legacy Financing:
- Reserve Based Lending (RBL) is standard—credit lines against discounted reserve cash flows. Bitcoin on balance sheets gets "zero credit" from banks, inhibiting a bitcoin treasury approach (74:29).
- Generators for mining are financeable (80% LTV), ASICs are not; most operators prefer rental or are smaller wildcatters willing to take capex risk.
- Hedging Risk:
- Natural gas is more readily hedgeable (3–5 years), while bitcoin/hash price hedging is immature, expensive, and illiquid (42:45).
Quote:
"A frustrating aspect has been the bitcoin on our balance sheet...is given almost zero credit. In their eyes they're like, well, you don't have much cash. Yeah, we don't have much cash, but we have a good amount of bitcoin that you're giving zero credit to."
— Sean (74:29)
8. Industry Outlook: Strategic Priorities & Scaling
- Geographic Focus:
- 360 targeting geographies where flaring regulations create pain: Wyoming, New Mexico, North Dakota (77:33).
- Texas is permissive with flaring but highly competitive.
- Service Track Record:
- Strategic to build a record with rental model in strict-flaring regions, enabling future bank financing/capital efficiency.
- Changing Drill Programs:
- Small operators already drilling wells specifically for bitcoin mining; predicts large public oil/gas companies will add mining to drilling programs in ~4 years (83:06).
Quote:
"The interesting thing will be, when is a big public guy going to build [bitcoin mining] into the drill program?... I'd say four years from now until a big public eye is actually planning a drill program around this."
— Sean (83:06)
Notable Quotes & Memorable Moments
-
On Renewable Energy Disillusionment:
"Quickly became fairly jaded, frankly, with the whole renewable craze. I think it was overhyped. The asset returns were just not attractive, frankly."
— Sean (07:25) -
On the Bitcoin Mining Shift:
"I didn't want to be a managing director at Blackstone...I was loving what I was doing at 360 with Chris."
— Sean (19:08) -
On the Nature of Oil & Gas vs. Bitcoin Mining Economics:
"In the bitcoin mining side you have to invest capital day one, but your revenue is going to be a lot higher."
— Sean (35:37) -
On Industry Adoption:
"We're in the first inning of understanding in the oil and gas industry broadly. I think people have heard about this idea or they've had someone approach them maybe, but it typically has not gone well for various reasons."
— Sean (55:22)
Important Timestamps
- Background and Blackstone Experience: 01:37 – 09:15
- Covid Pivot to Renewables at Blackstone: 06:27 – 08:44
- Discovering Bitcoin & Fiat Skepticism: 09:48 – 12:28
- Oil/Gas & Mining Economics Comparison: 21:00 – 26:16
- Low-Cost Producer Dynamic (Energy vs. Mining): 26:50 – 29:34
- Asset Valuation for Bitcoin Mining: 33:12 – 39:06
- Volatility & Hedging Challenges: 40:10 – 43:34
- Service Model & Incentive Structures: 50:27 – 54:45
- Industry Receptivity and Education: 55:22 – 56:53
- Asset Financing & Bitcoin as Collateral: 71:56 – 76:26
- Strategic Geographic Expansion: 77:33 – 79:30
- Drill Program Evolution & Bitcoin Mining: 83:06 – 85:08
Conclusion
This episode offers a candid deep dive into the intersection of traditional oil & gas finance and modern bitcoin mining, as lived by Sean Milmoe. The conversation demonstrates how existing energy expertise and financial engineering can unlock new synergies in decentralized compute—provided the regulatory, technical, and cultural factors are addressed. The parallels between commodity production and mining, the challenge of volatility, and the slow but inevitable shift in legacy industries all mark this transition as both a calculated risk and a pioneering opportunity in the bitcoin ecosystem.