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#Breeze — 1/25/2023 9:46:19 AM

[Glenn Petersen] Bitcoin Mining Firm Riot Ditches 'Blockchain' From Name in Rebrand The company ...

Glenn Petersen — 1/4/2023 10:37:58 AM

Bitcoin Mining Firm Riot Ditches 'Blockchain' From Name in Rebrand

The company will rebrand as Riot Platforms, as it diversifies amid a bleak outlook for the wider Bitcoin mining industry.

By Will McCurdy
Decrypt
Jan 4, 2023
2 min read

Bitcoin mining firm Riot Blockchain has rebranded to Riot Platforms, in a move intended to reflect the company's “increasingly diversified business operations.”

Riot, which has seen its market capitalization collapse by over 85% in the past year, remains the world's most valuable publicly traded Bitcoin mining firm, well ahead of its closest rival Marathon Digital Holdings by valuation.

The past few years have seen Riot engage in a significant number of acquisitions, some of which could potentially support a transition toward a more diversified business model.

In December 2021, Riot acquired ESS Metron, a Denver-based electrical component engineering firm that caters to the power and water industries, in a deal worth approximately $50 million of Riot's common stock and $25 million in cash.

The company also acquired Whinstone US, the owner and operator of North America’s largest Bitcoin mining and hosting facility, in May 2021, with the deal estimated to be worth around $651 million.

I predict a Riot’s common stock will continue to be listed for trading on the NASDAQ stock exchange under its existing ticker symbol RIOT.

This isn’t the first time that mining companies have shifted away from a blockchain focus in their branding.

As far back as August 2022 crypto miner Applied Blockchain (APLD) announced its rebranding to Applied Digital, as it looked to dedicate some of its computing power to other high-performance computing applications beyond mining.

It’s understandable why some Bitcoin mining firms are looking to pivot away from a focus on mining, as the sector struggles in the face of the ongoing crypto winter and increased energy prices. A number of well-known firms within the industry have either declared bankruptcy or are in the midst of wide-ranging restructuring plans to avoid it.

In late December Core Scientific, which was once one of the industry's largest Bitcoin miners, filed for Chapter 11 bankruptcy protection in Texas.

That same month, Bitcoin miner Greenidge announced that there was “substantial doubt” about its capacity to continue as a business, saying that its Board of Directors was actively discussing the possibility of voluntary bankruptcy amid complex plans for debt cancellation.

Bitcoin Mining Firm Riot Ditches 'Blockchain' From Name in Rebrand - Decrypt

[Julius Wong] Riot Blockchain reports 433% increase in October bitcoin production Nov. 03, 20...

Julius Wong — 11/3/2021 10:07:40 AM

Riot Blockchain reports 433% increase in October bitcoin production

Nov. 03, 2021 9:27 AM ET Riot Blockchain, Inc. (RIOT) By: Khyathi Dalal, SA News Editor 9 Comments

Velishchuk/iStock via Getty Images

Riot Blockchain (NASDAQ: RIOT) produced 464 BTC in October 2021, an increase of ~433% Y/Y; YTD, the company produced 2,921 BTC (+257% Y/Y).

As of Oct. 31, 2021, Riot held ~3,995 BTC, all produced by the company's self-mining operations.

Currently, the company has a deployed fleet of ~27, 270 miners with a hash rate capacity of 2.8 exahash per second.

With its recently completed $54M purchase order with Bitmain Technologies for 9K S19j Pro miners with expected delivery and deployment schedule set for May 2022 through October 2022.
The company expects that with this order it will have ~90,150 Antminers in operation utilizing ~284 MW of energy, by Q4 2022.

Riot has thus increased its 2022 estimated hash rate capacity by 11.7% to 8.6 EH/s, representing an increase of ~0.9 EH/s over the company's earlier announced estimate of 7.7 EH/s.

Shipments of 11,500 S19J Pro Antminers under previous purchase orders are expected to be shipped to Riot’s Whinstone facility in November 2021.

[Glenn Petersen] Two of the biggest bitcoin mining companies in the world are battling it out in ...

Glenn Petersen — 11/1/2021 5:50:29 AM

Two of the biggest bitcoin mining companies in the world are battling it out in a Texas town of 5,600 people

PUBLISHED SUN, OCT 31 20219:26 AM EDT
MacKenzie Sigalos @KENZIESIGALOS
CNBC.com

KEY POINTS

-- Bitdeer – a firm spun off from Chinese bitcoin mining giant Bitmain – is four-tenths of a mile down the road from Riot Blockchain, one of the biggest publicly traded mining companies in America.

-- Both are tenants of property once occupied by aluminum maker Alcoa.

Riot’s Whinstone mine in Rockdale, Texas. / Riot’s Whinstone Data Center
-------------------

ROCKDALE, Texas – In this rural Texas town of 5,600 people, two of the biggest names in bitcoin mining are battling it out for market share and cheap electricity.

These rivals also happen to be next-door neighbors.

Bitdeer – a firm spun off from Chinese bitcoin mining giant Bitmain – is four-tenths of a mile down the road from Riot Blockchain, one of the biggest publicly traded mining companies in America. Both are tenants of property once occupied by aluminum maker Alcoa, but they share little else in common.

Riot’s Whinstone mine is run by a team that thrives on transparency and throws open its doors to media on a daily basis, while Bitdeer is aloof, steeped in mystery, and definitely not keen on visitors.

“In this industry, everyone’s like, ‘Ooh, top secret, we have proprietary information!’ Well, actually, you don’t,” Whinstone CEO Chad Harris told CNBC.

“You take a cable, you plug it into a machine that somebody else built, you turn it on, you add a pool, and you mine bitcoin.”

Whinstone CEO Chad Harris takes CNBC on a tour of the largest bitcoin mine in North America.
------------------------------------

Why Rockdale

Located an hour northeast of Austin, Rockdale looks like classic rural America. There are rolling hills, pastures of green grass, hay bales, a Walmart – which Mayor John King says is the main driver of sales tax, a key revenue stream for the city’s annual budget.

But to the more discerning eye, Rockdale offers all the fixings of a bitcoin miner’s dream home: Crypto-friendly politicians, large swaths of land, previously abandoned industrial infrastructure ripe for repurposing, and the ability to plug into Texas’ power grid.

The Electric Reliability Council of Texas, or ERCOT, is the non-profit organization that operates Texas’ grid. The grid is deregulated, meaning that customers can choose between providers.

Because miners at scale compete in a low-margin industry where energy is their main variable cost, they have reason to migrate to the world’s cheapest sources of power. The competition among power providers in Texas is a good thing for miners, since it typically translates to lower rates.

Rockdale was once home to the largest aluminum plant in the world, run by Alcoa. But starting in 2008, it began to shut down its operations, meaning that energy capacity was going to waste, due to the prohibitive cost of building the transmission capacity necessary to carry it to major population centers, according to Lee Bratcher, president of the Texas Blockchain Council.

The arrival of the crypto miners resolved that imbalance.

In addition, miners can be flexible in the face of fluctuating power supplies and prices. Unlike an aluminum smelter or just about any other business, miners can deal with an outage without suffering major financial damage.

This resilience is significant to a state that has recently struggled with the reliability of its power grid, which is separate from the rest of the country.

ERCOT sometimes asks consumers to conserve energy amid heat waves. The state also infamously suffered blackouts earlier this year after severe winter storms.

Mayor King says today’s arrangement between miners and ERCOT is pretty simple and mutually beneficial. Not only do miners make use of power otherwise going to waste, they also function as “interruptible load,” meaning they are able to turn off all of their machines with a few seconds’ notice when the grid is in a pinch and needs the extra power. Miners volunteer to do this because of financial incentives.

“Miners are committed to buying a certain amount of power and what they do is they sell it back at market [value] and make a profit,” explained King. “They have a contract of two cents or three cents...and they can sell it for $9 a kilowatt hour.”

Power supply for Whinstone’s bitcoin mine in Rockdale, Texas.
-----------------------------------

“There were lots of things that went wrong,” Sen. Ted Cruz, R-Texas, said of the winter storm in early 2021 that devastated much of the state. “But I do think that bitcoin has the potential to address a lot of aspects of that.”

Cruz, whose views on bitcoin and the mining industry more widely, have proven prescient, recently weighed in on the topic at the Texas Blockchain Summit in Austin. During his main stage interview, Cruz pointed to the importance of the ability of bitcoin miners to turn on or off within seconds – a feature that is hugely beneficial during times when energy needs to be shifted back to the grid to meet demand.

“A lot of the discussion around bitcoin views bitcoin as a consumer of energy,” said Cruz. “The perspective I’m suggesting is very much the reverse, which is as a way to strengthen our energy infrastructure.”

Rockdale’s economic development director, James Gibson, says the town has 160 acres ready for the taking.

King has already fielded close to 40 inquiries from mining companies keen to set up shop there, many of whom are Chinese miners. Earlier this spring, Beijing cracked down on its domestic crypto mining industry. Exiled miners have since begun to seek refuge in places like the United States, which recently became the top mining destination on the planet.

“They have money. They have equipment. They just need a place – and power, quick,” said Gibson.

Bitdeer’s bitcoin mine in Rockdale, Texas.
--------------------------------

David vs. Goliath

At the main entrance to Bitdeer’s Rockdale mine is a small tin shed accented with light blue trim, staffed by a smiling, upbeat guard. There is no gate, nor are there any spike strips on the pavement to deter unwelcome vehicles. Considering how secretive Bitdeer is as a company, it seems relatively welcoming – and surprisingly easy – to gain entry to the property.

But the company is still fairly closed off. CNBC asked for a tour and an interview, and we were told that while they “valued” the meeting, the person in charge was traveling for several weeks, and it was hard to define their schedule.

The mayor, whose son landed a full-time job with Bitdeer this year, shared a bit about the operation.

Unlike Riot’s Whinstone mine, built in what was once thickly wooded forest, Bitdeer took over the closed Alcoa smelter, which was conveniently still hooked up to major electrical lines. King says most of the football-length buildings that Bitdeer now occupies were constructed in the fifties and had to be retrofitted – a process that included filling concrete into the concaves in the floor where smelting pots once processed aluminum.

According to King, Bitdeer is “expanding as fast as it can be built.”

Not much else is known about the specifics of how Bitdeer’s bitcoin mining operation works. CNBC reached out to ask how many mining rigs and employees they have on site, as well as how much cryptocash they mine in a given month, and the company did not respond.

When Whinstone first broke ground in Rockdale in January of 2020, many saw it as the David to Bitdeer’s Goliath. Harris, the Whinstone CEO, hailed from New Orleans, where he was known for selling pre-decorated Christmas trees to wealthy families. The CTO, Harris’ youngest son, had blue hair and had just dropped out of college after his freshman year.

It was easy to underestimate the team. But Harris thrives as the underdog.

“No matter what Alcoa told us, we agreed to it,” said Harris, of the initial negotiations.

“They were like, ‘You need this amount for a deposit,’ and we were like, ‘Absolutely, no problem.’ They said, ‘You need a Moody’s graded guarantor,’ and I’m like, ‘Absolutely, no problem,‘” described Harris. After leaving these meetings, his business partners would remind him that they were broke and had no guarantor, but Harris’ response would always be the same: “This is the easy stuff. They said yes.”

Harris’ leadership style isn’t just about improvisation. The Whinstone CEO tells CNBC that his greatest skill is sending money to suppliers as fast as he can. “I always joke that when a million dollars lands in a company’s account, there is no way accounting is sending it back. They’ll force the people to do it – whatever it is.”

That strategy has repeatedly borne fruit for Whinstone as the price of bitcoin has skyrocketed over the last year or so.

“We bought all the orange conduit in the United States. Every last stick of pipe you could get your hands on,” Harris recounted. “And then they call back a week later saying they made a mistake. ‘We can’t deliver all this.’ We’re like, ‘Just send the money back.’ And then they say, ‘Hold up, I think we can solve it.’”

Alcoa leases space to Bitdeer and Riot Blockchain, two of the biggest bitcoin mining companies in the country.
--------------------------------------

Harris broke ground in Jan. 2020 when bitcoin was $4,100, they turned on the mine when it was at $6,100, and Harris remembers thinking that if bitcoin could just hit $8,000 a coin, they wouldn’t go bankrupt. The coin recently touched a new record price of nearly $67,000 in mid October.

“When we showed up here, this place was a forest,” Harris told CNBC from his office – one of many inside a prefab roofed trailer that sits adjacent the mine. “We didn’t have power lines...crazy stuff.”

183 days later, in June of 2020, Whinstone began mining. Harris estimates that on day one, they had 300% more capacity than Bitdeer.

But Harris doesn’t see it as a competition, nor does he feel the need to hide any trade secrets from his neighbors up the road.

“There is no IP in this business. That’s nonsense,” said Harris, though he clarified at multiple points that this was only his opinion.

Harris says that before Bitdeer was in town, Bitmain used to come over all the time to take a look around. They were most interested in Whinstone’s shelving and racking system.

“We brought them over, gave them the pictures, told them what machine to buy, told them how to do it. It still took them like eight months to plug the machine in,” he said.

Harris has publicly documented the whole process of building Whinstone, posting videos from in and around the Whinstone facility to YouTube. He also shares drone footage to give interested parties a sense of how expansion is going.

“It just doesn’t matter, because what we’re working on will take them two years to catch us,” Harris said. “We’re always two years ahead of what other people are doing.”

Riot’s Whinstone mine in Rockdale, Texas. / Riot’s Whinstone Data Center
------------------------

Inside America’s biggest bitcoin mine

When someone mines for bitcoin, they’re actually lending their computing power to the bitcoin network. Roughly every ten minutes, 6.25 new bitcoin are created. In order to mint these new tokens, a global pool of miners compete against each other to see who can unlock a batch of new bitcoin first.

The more machines a miner has online, the greater its share of the network’s hashrate, and the better its chances at winning bitcoin.

Whinstone has multiple buildings on site, each stacked 20 feet high with rows of computer hardware designed specifically for this purpose. Harris estimates that at its current capacity, it’s producing more than 500 bitcoin per month, which at today’s prices, is about $30.7 million, or $368 million a year. The firm claims to have around 100,000 machines on site.

Riot acquired the Whinstone mine earlier this year for $80 million, and it is now billed as the biggest in North America. The company is still expanding, and once the build-out of the 100-acre plot of land is complete, the crypto mine is expected to have a total power capacity of 750 megawatts.

To put that in context, Gibson says that downtown Dallas uses just 200 megawatts. “So it’s like having downtown Manhattan, downtown Dallas, all in our backyard,” continued Gibson.

The grid has that amount of power to give. The tricky part is in physically tapping into it. Mines need special equipment to adjust the voltage to a usable level. Transformers take the power from a substation and convert it to a lower voltage that can then be used to power bitcoin miners.

“Transformers you can get in about 12 weeks if you were hot to try and had cash, but you’ve still got to get the power off of the lines,” said King. The wait for a substation is 16 to 18 months, according to King.

Whinstone builds its own substations which gives the firm an advantage over other would-be miners looking to head to Rockdale. They are in the process of installing three 100-megawatt transformers now.

“The irony in that is if you want that transformer today, and you haven’t ordered it, it’s 64 weeks,” said Harris.

A “hot aisle” in Riot’s Whinstone bitcoin mine, where temperatures can hit 150 degrees thanks to the heat created by mining rigs.
-------------------------------------

Whinstone is also in the business of trying out cutting-edge tech.

When rigs are mining, they run a computer program which crunches millions of math equations. Doing all those computations is hard work, which is why the hardware gets hot, fast. To make sure they don’t overheat, a facility will typically install fans to cool them down. At the Whinstone site, this hot air is blown by individual fans into a central chamber known as the “hot aisle.”

Harris took CNBC inside to feel out the temperature, which can hit 150 degrees.

But now, Riot is trying out immersion cooling in a couple buildings at Whinstone. The computers are submerged in a specialized fluid that keeps the integrated circuits operating at lower temperatures. The heated fluid is subsequently pumped and circulated to help with dissipating the heat, at which point the cooled fluid is then pumped back in.

The company says it’s the first time it’s been done at an industrial-scale. All in, the immersion-cooled buildings are expected to host approximately 46,000 S19 series Antminer ASICs. (The term originally referred to the specialized integrated circuits most useful for mining but now is often used as shorthand for a mining rig or computer.)

Riot CEO Jason Les thinks this will be a game changer for the company’s bottom line.

“We anticipate observing an increase in the company’s hashrate and productivity through 2022, without having to rely solely on purchasing additional ASICs,” Les said in a statement.

Whiplash in Rockdale

Mayor King is a crypto miner himself. He has 37 five-terabyte hard drives plugged in all around his house, and he uses those machines to mine for chia, an eco-friendly cryptocurrency. The mayor tells CNBC he generates about .035 chia a day, or $4.68.

King has spent years teaching himself about how crypto and blockchain works, mainly because the town of Rockdale really needed this bitcoin experiment to work out.

For a long time, Rockdale was a one-company town. Alcoa employed thousands of residents, up until it was forced to close.

Then there was Bitmain. The China-based company said it would invest $500 million to build a massive mining facility at the decommissioned Alcoa power plant in Rockdale in 2018 and create 400 local jobs in the process. But as the world descended into crypto winter, so too did the company’s ambitions. Bitmain soon put its plans on ice.

It didn’t help that the city’s only hospital abruptly shut down in 2018. At the same time, Rockdale was in the thick of battling a problem with its water system, where residents complained of smelly red water coming out of their faucets. Rockdale seriously needed a break.

But then in came Whinstone and a newly invigorated Bitdeer, which had recently split from Bitmain following infighting at the top. Whinstone has spearheaded multiple efforts at job creation and local community outreach.

“The Rockdale economy was devastated for several years until the bitcoin miners showed up,” said Bratcher.

Some remain skeptical after years of whiplash. But King thinks this time really is different.

Beijing exiling all of its crypto miners was a black swan event for the industry. For years, China dominated this business, boasting 75% of the world’s bitcoin miners at its peak. But after its crackdown, a mass migration of humans and physical hardware got underway and many began to head to Texas.

This migration is still happening now and many want to plant their flag in Rockdale, which is just fine by King.

Bitcoin mining giants Bitdeer, Riot Blockchain in Rockdale, Texas (cnbc.com)

[Glenn Petersen] Riot owns Whinstone. Bitcoin miners break new ground in Texas, a state hailed a...

Glenn Petersen — 7/10/2021 2:28:13 PM

Riot owns Whinstone.

Bitcoin miners break new ground in Texas, a state hailed as the new cryptocurrency capital

The Lone Star State is at the center of global attention to produce bitcoin

By Dalvin Brown
The Washington Post
July 8, 2021|Updated July 8, 2021 at 5:36 p.m. EDT

ROCKDALE, Tex. — Chad Harris, the CEO of Whinstone Inc., the operator of the largest crypto “mine” in North America, remembers one of the last times Texas’s electric power problem became his electric power problem.

It was a Wednesday in June, and evening temperatures were hovering around 94 degrees — far higher than the state usually suffers at that time of year. Texans were churning up their air conditioning, and the state’s grid, which infamously failed for days during a cold snap in February, was straining.

“We just got a text saying, ‘The power grid needs support. Please curtail now,’ ” Harris said, while standing outside the company’s mining center at an old Alcoa aluminum facility about six miles outside this Central Texas town. Instantly, Whinstone’s system went offline. The tens of thousands of computer servers that spin away generating bitcoin inside three long buildings simply stopped. “With the flip of a switch, we turned this off,” Harris said.

In the world of crypto mining, having all your computers shut down at once, and stay down for hours, as they did in June, sounds like a disaster. Crypto miners compete with one another the world over to generate the computer code that results in the production of a single bitcoin, and the algorithm that governs bitcoin’s production allows only 6.25 bitcoin to be produced every 10 minutes, among the perhaps 70,000 crypto mines that operate around the world. If you’re not able to generate the code, but your rivals can, you are out of luck.

But thanks to the way Texas power companies deal with large electricity customers like Whinstone, Harris’s bitcoin mine, one of the few owned by a publicly traded company, didn’t suffer. Instead, the state’s electricity operator, the Electric Reliability Council of Texas (ERCOT), began to pay Whinstone — for having agreed to quit buying power amid heightened demand.

That sort of arrangement has helped make the state one of the go-to locations for expanding crypto entrepreneurs the world over, despite its continued agonizing over power shortages. Indeed, Whinstone’s new owners are undertaking a major expansion of its facility outside Rockdale, with the intention of doubling its capacity. When fully developed, the crypto mine here is expected to require 750 megawatts of power — enough to power more than 150,000 Texas homes during peak demand.

And it’s not just Whinstone. More crypto farms want to move into the area as China, believed to be the nation with the most crypto miners, moves to restrict local bitcoin mining and trading by, among other limitations, ordering power companies not to sell them power. Shenzhen-based BIT Mining said in May that it plans to invest more than $25 million in a Texas data center, while Beijing-based server firm Bitmain is already modernizing the old aluminum plant across the street from Whinstone’s Rockdale-area facility.

Rockdale’s mayor, a bitcoin miner himself with a rack of computers in his home, says he’s met with at least one other firm interested in locating here. Whinstone, which leases shelving on its campus to other crypto miners’ servers, has been contacted by “several,” the company’s CEO said.

It’s not just happening near Rockdale. Peter Thiel-backed crypto mining firm Layer1 Technologies last year opened a plant near Pyote in West Texas (population 138 in the 2020 census). In February, Canada’s Argo Blockchain announced plans to buy 320 acres of land in the same West Texas area within a year.

Events in China might make mining even more profitable for farms in Texas. Over the July Fourth weekend, as bitcoin’s code self-adjusted to accommodate a sudden drop in global bitcoin miners tied to the crackdown in China, it became 28 percent less difficult to produce new bitcoin, according to the bitcoin data service BTC.com.
“One good thing about crypto mining is it’s adding flexibility to the system,” said Peter Cramton, a former board member of ERCOT, the nonprofit that’s charged with managing the state’s wholesale energy market. “But the problem is it’s consuming real resources, doing a function that has no value.”

In mid-June, the state asked Texans to cut back on power by setting their thermostats to 78 degrees or higher as statewide electricity demand crept toward 70 gigawatts, nearly all that companies could generate at the time.

How much the crypto explosion has helped Rockdale’s economy is open to debate. For 50 years, Rockdale, with a population of about 5,600, was a company town, with hundreds of jobs at Alcoa’s nearby coal mine and aluminum smelter. Its economic success even earned it the nickname “The Town Where It Rains Money” in a 1952 article by the Saturday Evening Post. But in 2008, Alcoa closed the mine and smelter, eliminating 1,200 jobs, and in 2018 the firm’s power plant was shut down, adding to those job losses.

But the electrical lines supporting those operations remain, making it an attractive site for bitcoin investment. Whinstone hired roughly 100 workers when it moved into town. But so far, the investment hasn’t spurred meaningful growth.

“What’s 100 [newly hired] employees when you lost maybe 2,000 employees? It’s not significant,” said John King, Rockdale’s mayor, who worked at the old Alcoa plant in the 1980s. His efforts to operate a crypto mine with a few servers in his home haven’t really paid off either. “I’m not very successful at it, and I can’t afford to keep buying hard drives,” he said, a reference to the hotly competitive market where the winnings go to those with the most computing power.

And Whinstone has a lot. The company’s fenced-off crypto compound houses more than 100,000 computer servers, stacked 20 feet high lining some of the walls. When the expansion is completed by the end of 2022, that number will have more than doubled, according to the company’s CEO.
On the outside, machines can be heard buzzing as workers in hard hats prep the 100-acre lot in near 100-degree temperatures for mining expansion. It’s even louder and hotter on the inside, where fans on mining servers expel heat into a central “hot aisle.” When the power is on, the chamber can hit 150 degrees as scorching air is shot out the ceiling. When the system powers down, the chamber’s temperature falls soon after.

Bitcoin mines of Whinstone’s size may be capable of creating roughly 500 bitcoin per month, the company says. At today’s bitcoin value of approximately $34,000, that’s $17 million, helping to explain why Riot Blockchain, a publicly traded company, paid $80 million in May to acquire Whinstone.

Expansion is an expensive undertaking, too. Each of Whinstone’s buildings costs about $40 million to build. Still, Whinstone feels bullish on its future in Texas. The state provides myriad prime conditions for mining.

For one, it has a deregulated electricity landscape that allows energy customers to choose their provider. The state often offers some of the cheapest energy prices in the country. And the arid locale known for its oil and gas business is the nation’s leading energy producer. As such, crypto data centers requiring a seemingly endless amount of power know where to get it.

When power prices start to rise because of increasing demand, software from start-ups like Texas-based Lancium give mines the flexibility to adjust their power consumption accordingly. The code is interfaced with online notices from ERCOT, triggering servers to power down during times of extreme energy shortages.

During the days-long blackout that crippled Texas in February, bitcoin mines completely went offline. ERCOT paid the companies for doing so.

“There’s a lot of opportunities here compared to other states,” said Katie Coleman, an Austin-based energy attorney. “Cryptocurrency miners can avoid high energy periods, get paid for doing that, and therefore get power for next to nothing here.”

Why Rockdale? Whinstone moved to the town’s perimeter from Louisiana in 2019 to take advantage of relaxed regulations and Alcoa’s shuttered facilities. The company signed a long-term lease with Alcoa, flattened trees on the unkempt land and completed three buildings in 18 months.

Wanting to be well-liked among locals, Whinstone donated “a significant amount of money” to the Rockdale Police Department. “Then they probably spent $5,000 on fireworks for our graduating senior class,” King, the mayor, said.

The showering display was a notable investment, he added, in a four-square-mile town that hosts a Walmart, one other grocery store, a handful of Mexican restaurants and a couple of pizza places. It’s also home to one of the oldest motels in Texas, Rainbow Courts, which is somewhat of a tourist destination built over a century ago.

The move to the community’s perimeter came as the start-up was running low on capital. The firm says it needed the recent Riot Blockchain buyout to expand. Riot needed Whinstone’s infrastructure to run its mining hardware.

“Our issue here was getting enough capital to build faster,” said David Schatz, vice president of operations at Whinstone. “We virtually had an endless supply of power, whereas other companies, our competition —their issue is scaling up their power.”

Bitcoin mining company Whinstone finds a welcome in Rockdale, Texas - The Washington Post

[The Ox] coingeek.com Riot Blockchain buys Texas data center for $650M from rival Northe...

The Ox — 4/19/2021 9:28:09 AM

coingeek.com

Riot Blockchain buys Texas data center for $650M from rival Northern Data

TECH 18 APRIL 2021

Steve Kaaru

Riot Blockchain (NASDAQ: RIOT) has announced that it’s set to purchase the largest BTC block reward mining center in the United States. It will now reportedly become the largest publicly-traded blockchain mining company globally.

Riot revealed in a press release that it has signed a definitive agreement to acquire Whinstone U.S Inc. from its rival Northern Data AG. It will pay $80 million in cash and $571 million in its common stock, equaling a total transaction value of $651 million.

[Glenn Petersen] Riot Blockchain to spend $138.5 million on bitcoin mining hardware, with shipmen...

Glenn Petersen — 4/7/2021 11:56:47 AM

Riot Blockchain to spend $138.5 million on bitcoin mining hardware, with shipments scheduled through October 2022

by Wolfie Zhao
The Block
April 7, 2021, 11:10AM EDT · 1 min read

Nasdaq-listed bitcoin mining firm Riot Blockchain has placed an order to buy bitcoin miners worth $138.5 million that will ship through October 2022.

The firm said in a statement on Wednesday that it is buying 42,000 units of Bitmain's AntMiner S19j at a cost of $3,300 per set, which means Riot is preordering the future batches at $36 per terahashes per second (TH/s) of computing power. The standard hash rate of an AntMiner S19j is 90 TH/s.

The Block reported last week that spot stock prices for the newest generation of bitcoin mining equipment, such as Bitmain's S19 series, are as high as $120 per TH/s, constituting a five-fold premium compared to their preorder prices months ago.

While Riot's cost for the new orders appears to be considerably cheap compared to those spot prices, the delivery of the new batches will not start until later this year.

Riot said it is poised to receive a minimum of 3,500 units of S19j AntMiners on a monthly basis starting in November, with shipments continuing through October 2022.

At the full deployment, the firm said it is estimated to have 7.7 million TH/s of computing power, or about 4.6% of the network's current total.

Bitcoin's surging prices and the ongoing global chip shortage have significantly driven up the cost of bitcoin mining equipment.

Indeed, Riot inked a deal with Bitmain in August 2020 to invest $17.7 million in 8,000 units of the manufacturer's AntMiner S19 Pro, which were scheduled to be fully delivered by this month.

The standard hash rate of an AntMiner S19 Pro is at 110 TH/s, which means Riot is now paying 50% more for a mining model that is less advanced than the ones it bought last year.

Story Link

[Glenn Petersen] The risky bitcoin buy that’s in a bigger bull market than the cryptocurrency its...

Glenn Petersen — 3/21/2021 4:49:49 PM

The risky bitcoin buy that’s in a bigger bull market than the cryptocurrency itself

PUBLISHED SUN, MAR 21 202112:42 PM EDT
UPDATED SUN, MAR 21 20211:46 PM EDT
Eric Rosenbaum @ERPROSE
CNBC.com

KEY POINTS

-- Bitcoin mining stocks have generated returns far greater than the bitcoin cryptocurrency in the digital asset’s recent bull market, according to an analysis from Fundstrat Global Advisors.

-- That makes them worth investor attention, but these miners are risky and should be expected to fall more than bitcoin in a digital currency crash.

-- Bitcoin is likely to be a better long-term bet even if the top mining companies have economies of scale established, and for most investors so will any bitcoin ETF approved by the SEC.

All commodities markets have their levered investment bets. Crude oil has wildcat exploration and production companies; gold and precious metals have the mining operations out doing the dirty work in the ground. A commodity of the future, bitcoin, is no exception to the rule that when there’s a scarce resource to exploit in the world, and investors are placing increasing value on it, miners will rush in to stake their claim to the riches.

Recent gains in what may be the most high-risk bitcoin bet of all led Leeor Shimron, vice president of digital asset strategy at Fundstrat Global Advisors, to take a look at the “digital gold rush” in trading of bitcoin miners.

These mining companies are fairly new and young, they lack track records, and some came to market in “roundabout ways” — and some of the biggest, like Riot Blockchain, attracted regulatory scrutiny in their early days. They also have been operating at losses, but Shimon noted they have reached over $1 billion in market cap after investing heavily during the bitcoin downturn in the hardware and facilities that helped them to “strike it big” in the current bitcoin bull market cycle.

High-beta, high-risk bitcoin trading

Shimron described the miners in a note last week to clients who expressed interest in the surging stocks as a “high beta play” on bitcoin. During the recent bull run for the cryptocurrency, during which bitcoin is up 900%, the average return among the biggest publicly traded miners was 5,000%, according to his analysis.

Bitcoin miners, in Shimron’s words, form the core backbone of bitcoin’s blockchain, as they “burn electricity to computer-generate guesses aiming to solve cryptographic puzzles” and generate revenue in the form of mined bitcoin. As the bitcoin is mined, the miners sell the assets to cover their expenses. Many choose to also hold a portion of their mined bitcoin on their corporate balance sheet, a trend which is starting to gain traction with the more digitally-oriented, disruptive CEO class in the broader market, such as Jack Dorsey at Square and Elon Musk at Tesla. Musk just added “Technoking” to his executive title and the Tesla CFO recently had “Master of Coin” added to his. The North American mining company, Marathon Digital Holdings, recently announced it had purchased an additional $150 million worth of bitcoin to hold on its balance sheet.

The largest publicly listed mining companies which the Fundstrat analyst reviewed include the two Nasdaq-listed companies, Riot Blockchain and Marathon Digital Holdings, and two over-the-counter market stocks, Hive Blockchain and Hut 8.

Over the past year, bitcoin miners greatly outperformed bitcoin, a dynamic that Fundstrat Global Advisors says will continue as the bull market plays out, but could turn violently to the downside in any correction.
Fundstrat Global Advisors

Shimron’s analysis shows that the beta these bitcoin mining companies exhibit generates a return of 2.5% for every 1% move in the cryptocurrency. While there is not enough historical data to draw firm conclusions, the miners’ performance is clearly tied to the price of bitcoin, and their trading profile amplifies the upside and downside, he said.

It is a “notoriously competitive industry,” in Shimron’s words, where the ability to be profitable can come down to cheap electricity and access to specialized mining hardware. As bitcoin’s price increases, “miners spin up new rigs or upgrade their hardware with more powerful and efficient machines.”

Marathon recently made a $170 million deal for 70,000 S-19 ASIC miners from Bitmain, which when fully deployed later this year, will up its mining power to 103,000 machines.

This high cost of doing business in bitcoin mining results in low or negative free cash flow and muted earnings, Shimron writes. But the mining companies have for the moment captured the growth of the current bitcoin bull cycle as a result of their spending. (They saw wild trading in the bitcoin boom of 2017, too.)

Now they have also attracted attention from some of the market’s newest forces, as a recent Bloomberg piece noted of the bitcoin miners getting discussed within the WallStreetBets message board on Reddit which fueled the mania in shares of GameStop.

“For investors looking to gain exposure to miners, that beta makes it a great opportunity during the middle of a roaring bull market. ...There are fits and starts and pullbacks, but we still have lots of room to grow here,” Shimron said in an interview with CNBC.

Investing in bitcoin in 2021, and beyond

It is the broader bull market in cryptocurrency that has fueled the miners and Shimon thinks that can continue in 2021, driven by macroeconomic and demographic factors. Fears of inflation will support bitcoin prices, and even amid recent yield pressure from the 10-year Treasury which can act on cryptocurrency as it does on technology stocks, he said it is clear from Fed signalling that the central bank wants to keep its dovish policies in place until 2023.

Another driving force is continued adoption of new digital technology and digital assets from younger investors. “You see younger people gravitate to bitcoin and other digital currencies as opposed to gold and commodities and it speaks to a demographic shift. ... To them it’s not crazy to interact with money in a purely digital way,” he told CNBC.

Last week, Morgan Stanley became the first big Wall Street bank to offer its wealthy clients access to bitcoin. It limited access to clients with at least $2 million given the risks involved.

There already are ways into the crypto market other than the underlying currencies, such as the exchanges which trade coin and soon will be available to more investors. Coinbase was recently valued at $68 billion in the private market and is planning a direct listing on the Nasdaq.

Waiting for a bitcoin ETF in the US

There are three bitcoin ETFs in Canada, and at some point, there may be a bitcoin ETF available in the U.S. The latest attempt at the Securities and Exchange Commission was filed mid-March by VanEck ETFs, but with investors not holding out high hopes the SEC will approve a bitcoin fund soon, they are looking elsewhere for cryptocurrency investment ideas that go beyond buying bitcoin itself.

Shimon, who ran an early-stage cryptocurrency and blockchain venture fund before joining Fundstrat, said he does view the miners as being a foundation for the crypto space. “The top companies will be here to stay,” he said, pointing to the economies of scale investing in equipment which newer entrants will have a tougher time competing against.

After making the “smart move” during the bitcoin bear market to build out operations, current tech sector supply chain shortages caused by Covid may further help the positioning of these miners after the capital they have already put into specialized machines for the space.

Still, like many traders and hedge funds do with gold miners and small-cap oil explorers, he is inclined to trade the bitcoin miners in a bull market run, rather than see them as investments to hold for the long-term.

The outperformance of the SPDR Gold Shares ETF relative to a VanEck ETF tracking an index of gold miners, since 2006.
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Shimron continues to prefer bitcoin as a long-term investment, as well as any ETF ultimately approved by the SEC for U.S. investors. “It is just a matter of time before the SEC approves a bitcoin ETF,” he said. “When a BTC ETF comes, the fees will be low and it will be the safest and easiest way of using traditional rails to get exposure to bitcoin,” he said.

The miners have faced criticism over the huge amounts of electricity required in bitcoin operations, but Shimron’s view comes down to the financials and market performance. (He says there is plenty to criticize about the fiat currency system’s impact on the world, too.)

“It is pretty clear the U.S. dollar as a global reserve currency is on its last legs, not disappearing any time soon, but we are in the later stages of the U.S. dollar as the reserve currency, and decentralized is the next stage.”

Even if the bitcoin mining stocks are too high risk for most investors, he is confident in saying that the world of cryptocurrency should be on everyone’s radar. “This is where everything is going. Finance has been the last vestige that hasn’t been touched by the internet,” Shimron said.

Story Link

[Julius Wong] Riot Blockchain: Riding The Bitcoin Wave Feb. 18, 2021 6:35 PM ETRiot Blockchain...

Julius Wong — 2/18/2021 8:07:53 PM

Riot Blockchain: Riding The Bitcoin Wave
Feb. 18, 2021 6:35 PM ETRiot Blockchain, Inc. (RIOT)4 Comments4 Likes

Summary

* Riot Blockchain, Inc. is up over 3 times what it was trading at on January 27.

* Its share price is starting to look frothy - may be time to take some profits off the table.

* The recent news that it has boosted hash rate will offer support in the long term.

* In the short term, the price of bitcoin and technicals will continue to drive its performance.

* The next couple of earnings reports should be positive catalysts for RIOT.

seekingalpha.com

[Glenn Petersen] Bitcoin Miners Posted $354M in Revenue Last Week, Breaking Record From 2017 Las...

Glenn Petersen — 2/15/2021 9:50:44 PM

Bitcoin Miners Posted $354M in Revenue Last Week, Breaking Record From 2017

Last week's mining revenue eclipsed the previous record set in mid December 2017.

Weekly bitcoin mining revenue estimates since 2017
--------------------------------

Zack Voell
CoinDesk
Feb 15, 2021 at 7:44 a.m. CST

Bitcoin miners set a new record for weekly revenue after bringing in $354.4 million last week.

-- Mining revenue growth was helped by the leading cryptocurrency's performance last week following a string of positive developments, culminating in bitcoin (BTC, +3.26%) hitting new record highs over the weekend just below $50,000.

-- "Despite decreasing block reward, mining revenue on a USD basis has trended upwards," said Ethan Vera, co-founder of Seattle-based mining company Luxor Technology, in a direct message with CoinDesk. "This is encouraging for the long term prospects of Bitcoin’s security and continued investments over the next few halving."

-- Weekly revenue eclipsed the previous record of $340 million set in mid-December 2017 near the peak of bitcoin's prior bullish market cycle. CoinDesk revenue estimates based on network fees and block subsidy data from Coin Metrics assume miners sell their bitcoins immediately.

-- Over 15% of the week's revenue was from network fees, continuing a trend of strong growth in fee-based revenue from May 2020, per CoinDesk's prior reporting.

-- "Our miners are incredibly bullish on the future of mining," Vera told CoinDesk. "January and February 2021 have been record months for most of them, and they are taking all of their profits and reinvesting it back into their business to grow future hashrate."

Weekly bitcoin mining revenue estimates since 2017
Source: Coin Metrics, CoinDesk Research
-----------------------

Story Link

[Zen Dollar Round] Just posted about RIOT in Trader J's thread. I think it's a good way to invest i...

Zen Dollar Round — 2/11/2021 10:28:58 PM

Just posted about RIOT in Trader J's thread. I think it's a good way to invest in cryptocurrencies without having to buy them directly.

[Glenn Petersen] FYI` Blockchain and Cryptocurrencies Message Board - Msg: 33193990 (siliconinve...

Glenn Petersen — 2/11/2021 10:04:59 PM

FYI`

Blockchain and Cryptocurrencies Message Board - Msg: 33193990 (siliconinvestor.com)

I also put the link in the header to the board.

[The Ox] [graphic]

The Ox — 2/11/2021 2:37:39 PM

[The Ox] Nov 9,2020 Earnings: ir.riotblockchain.com

The Ox — 2/11/2021 1:59:16 PM

[The Ox] finance.yahoo.com Riot Blockchain, Inc. Thu, February 11, 2021, 7:45 AM Castle...

The Ox — 2/11/2021 1:56:43 PM

finance.yahoo.com

Riot Blockchain, Inc.
Thu, February 11, 2021, 7:45 AM

Castle Rock, CO, Feb. 11, 2021 (GLOBE NEWSWIRE) -- Riot Blockchain, Inc. (NASDAQ: RIOT) ("Riot”, “Riot Blockchain” or the “Company"), one of the few NASDAQ-listed bitcoin mining companies in the United States, announced that it will achieve an estimated hash rate capacity of 1.06 Exahash per second (“EH/s”) with the deployment of the newly received 2,002 S19 Pro Antminers.

“Exceeding 1 EH/s in hash rate capacity marks a major milestone for the Company,” said Jason Les, CEO of Riot. “While we are proud of this accomplishment, we view it as the successful completion of just one of many steps of our ongoing growth plan. Riot continues to receive and deploy next-generation miners from Bitmain and remains on schedule to more than triple our currently deployed capacity by the fourth quarter of 2021.”

The 2,002 S19 Pro Antminers were received in connection with the purchase order from Bitmain as previously disclosed in August 2020, with installation expected to be completed over the next week. With the deployment of these 2,002 S19 Pro Antminers, Riot will have a total of 11,542 Antminers in operation. Riot’s hash rate capacity will reach an estimated 1.06 EH/s, representing a nearly 26% increase over its prior operational hash rate capacity upon installation of the new miners.

Riot has an additional 26,100 S19 Pro and S19j Antminers on order with Bitmain, which are scheduled for shipment each month through October 2021. Once fully deployed, the Company estimates it will have a total of 37,642 Bitmain Antminers in operation with an estimated aggregate bitcoin mining hash rate capacity of 3.8 EH/s. Based on recent shipments, Riot anticipates continued timely shipments in accordance with the Bitmain purchase orders.