Sydney-based bitcoin miner Iris Energy, which has a site in British Columbia, Canada, is deploying additional funds to increase its contribution to the global bitcoin hash rate.
The mining company is investing in new equipment to take its hash rate (a measure of mining power, higher means more powerful) from 3.7 EH/s at the end of Q3 2022 to 3.7 EH/s at the end of Q4 2022 4.3 EH/s. The company is expanding capacity at its MacKenzie, British Columbia plant from 50 MW to 80 MW to ensure it hits its 4.3 EH/s target by the end of the year.
Beyond this target, the company will delay further expansion given current market conditions.
Since the company started mining bitcoin in 2019, it filed for an initial public offering last October. Mining is the process of validating blocks of transactions on a blockchain by solving complex mathematical puzzles using specially designed computers called ASICs. Today, most large miners run server farms with advanced cooling systems filled with ASICs.
BTC liquidation becomes bear market sign
Unlike U.S. rivals Riot Blockchain and Marathon Digital Holdings, which traditionally hold coins, Iris Energy typically liquidates newly mined bitcoins. But current market conditions have even led giants like Riot and Texas-based Core Scientific to reconsider their stockpiling strategies. According to Bloomberg, Core Scientific recently sold 2,598 bitcoins, while Riot sold 250. Iris Energy’s Canadian neighbor, Bitfarms, also recently announced it was abandoning its holding strategy, opting to sell 3,000 bitcoins for about $62 million, injecting liquidity into the company and paying back debt.
Smaller miners may be bought out
As big miners bring more computing power online, the Bitcoin algorithm increases the difficulty of mining new bitcoins to prevent the concentration of computing power in the hands of a few. Mining revenue and transaction fees for newly minted coins hit an annual low of $14.4 million on June 16, according to Blockchain.com.
These factors, combined with fluctuating energy costs, could spell doom for a mining company like Xive, which opted to shut down some operations as Bitcoin fell below $25,000. The total hashrate began to decline on June 12. Smaller mining companies capitulated and went offline as Bitcoin began its six-day slide.
Alexander Nuemueller of the Cambridge Centre for Alternative Finance said it was a challenging time in the mining industry.
But companies like Iris Energy and Marathon (the latter investing $200 million to expand its operations in the first quarter of 2022) have fixed energy costs and greater tolerance for demanding markets.
Jaime Leverton, CEO of another Canadian company, Hut8, said there is also a level of vision and planning to help more well-known companies weather the current storm. Hut8 has accumulated 7,078 bitcoins that can be used for acquisitions, which the CEO of Argo Blockchain believes could be completed within a year.
What do you think about this topic? Write to tell us!
All information contained on our website is published in good faith and for general information purposes only. Any action taken by readers with respect to the information on our site is entirely at their own risk.