Welcome back! This is Canaan’s weekly update on bitcoin mining, energy, and compute infrastructure.

Nearly all the electricity that enters a compute facility leaves as heat, exhausted into the atmosphere through cooling towers and chiller loops. Cooling sometimes accounts for up to 40% of a data center's energy spend. Billions of dollars have been poured into removing heat faster and more efficiently, but comparatively little into asking a different question: what if the heat itself is the product?

That question is getting louder. District heating networks in the Nordics pipe data center warmth directly into homes. A recent Reimagine Appalachia report argues that AI data centers should recycle their excess heat to support local agriculture and municipal buildings. And regulation is catching up: Germany's Energy Efficiency Act now mandates that new data centers commissioned after July 2026 achieve an Energy Reuse Factor of at least 10%, rising to 20% by 2028.

Not all compute heat is created equal. Standard air-cooled data centers push out warm air in the 30–43°C range, which is useful for preheating, but generally too low-grade for horticulture without heat pumps. Liquid-cooled systems change the math. They can deliver water above 75°C. That’s hot enough to feed directly into a greenhouse's boiler loop, with minimal upgrading required. That temperature range is ideal for the closed-loop radiant heating that commercial growers depend on.

This is where high-density compute operators have been early movers. MARA's project in Finland warms roughly 11,000 residents through district heating. The horticultural application may be even more compelling than residential: greenhouses need consistent heat year-round, not just in winter, making them a steadier off-taker for any compute facility producing high-grade thermal output.

The idea behind the Canaan–Bitforest proof-of-concept in Manitoba is to test this directly. The 3 MW project is designed to pair 360 liquid-cooled Avalon servers with Bitforest's tomato-growing facility. Heat captured through a closed-loop exchange system preheats intake water for the greenhouse's electric boilers, displacing traditional heating with compute heat. At an estimated all-in power cost of $0.035/kWh and a target of 95% uptime, the system is designed to circulate up to one million tonnes of hot water annually.

The goal is to have a replicable model for anywhere cold-climate compute and growing operations sit side by side. As liquid cooling becomes standard across AI, HPC, and mining infrastructure alike, the pool of facilities capable of producing greenhouse-grade heat is about to expand dramatically. The operators who figure out the co-location playbook first won't just improve their own margins. They'll change how the next generation of compute facilities gets sited in the first place.

The Avalon2 was Canaan's second-generation miner, and the machine that turned ASIC mining into a global community movement. Built around the A3255 chip (55nm), it shipped in 145 GH/s and 300 GH/s configurations. The entire hardware design was open-source.

Schematics, board layouts, and firmware were all accessible to the public. Multiple community-designed controller boards emerged on BitcoinTalk. A user known as "Dogie" wrote setup guides that became the de facto standard. Hobbyists worldwide ordered A3255 chips and soldered their own miners, a brief era when you could build your own ASIC at home. 13 years later, the Avalon2 remains a reminder of where it all started.