Tech Talk: Columbus Startup Synota Leverages Bitcoin to Benefit Energy Companies
Industry veteran Austin Mitchell launches Synota to expedite payments and data within the energy sector.
The word “bitcoin” conjures up images of wild speculation in a mysterious, unregulated currency.
But Austin Mitchell sees the possibilities as a tool for value transfer. His new company, Synota, aims to use bitcoin technology to speed the flow of money and information within the energy industry.
In doing so, Synota aims to do everything from grease financial transactions to catalyze the transition to clean electric power generation. “In my time in the industry, I’ve seen the value chain in its entirety. Aspects of the physical side have become very efficient and gotten digitized over the last 20 years, but the financial side is still stuck in analog,” Mitchell says.
The first problem Synota solves is a cash flow one, he says. Mitchell explains that while electricity generation and distribution have “gone digital” over the past 20 years, the way utility companies get paid has not. Power companies and grid managers can see customers’ utilization instantly, but they still only get paid for usage once a month: 30 days after their 30-day billing cycle.
Mitchell, who has experience in the electricity sector, estimates around 10 percent of the total cost for energy is due to financial inefficiency in the industry.
To boot, because it is a complicated industry with many producers feeding into a hyper-complex grid network, there is a valuable flow of energy-production data, but that data is disconnected from the payment process and the energy itself.
Synota proposes a solution by which energy producers can get paid in real time via a series of bitcoin transactions—and the proprietary process would knit together value streams, as well. “It’s useful for utilities, for users and for policymakers to know how you consume energy and when—so your data matters. Then there are the environmental attributes of the energy itself. It matters more and more if electrons are produced at a coal plant or solar farm,” Mitchell says. “Our software takes those four value streams and links them into one system, so when electrons move, money moves, data moves, environmental attributes move.”
Synota rapidly moves data and money by transacting on bitcoin’s Lightning Network. Bitcoin is employed for just fractions of a second, as a technology for instantaneous value transfer.
Mitchell, who earned a Ph.D. in engineering and public policy from Carnegie Mellon University, has worked in multiple roles in the electricity industry, including transmission and generation. By mid-2021, he’d begun to focus on the nagging gap between data and financial flow and pondered how blockchain could solve that problem.
By year’s end, he’d formed a network of industry peers and Synota was born. The company has some big fans. Led by Ego Death Capital, a bitcoin-centered venture capital firm, Synota raised $3 million in a round that closed in September 2022.
Mitchell says the company will spend 18 months building and executing solutions for beta clients in the bitcoin mining industry, which uses significant amounts of electricity.
As for the future, Mitchell says the data revolution Synota hopes to lead will be more than a money-saving widget. Giving policymakers and industry more granular data on how and where clean energy needs to move, and how customers use it, will be a revolutionary change in how the industry operates—one that Mitchell says will be vital to an equitable transition to clean energy.
Cynthia Bent Findlay is a freelance writer.
This story is from the Spring 2023 issue of Columbus CEO.
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