Sebastian Sinclair

Bitmain has agreed to invest $53 million in embattled bitcoin miner Core Scientific alongside a new hosting agreement, as the sector grapples with historically low prices.



The Beijing-headquartered ASIC supplier will plow $23.1 million in cash into the mining company, with the remainder slated for Core Scientific shares, the companies revealed Thursday.



The agreement is contingent upon a year-end approval of a Chapter 11 reorganization plan for the mining firm. Bitmain’s hosting contract with Core Scientific is intended to back its mining operations, the companies said.



It includes the supply of 27,000 Bitmain S19J bitcoin mining servers, with a maximum <a href="https://blockworks.co/tag/hashrate">hashrate</a> of 151Th/s, to Core Scientific. The servers are slated for delivery in the fourth quarter of 2023 and are expected to add 4.1 EX/s to Core Scientific&#8217;s self-mining hashrate, they said.&nbsp;



It comes as the mining sector stares down historically low hash prices — the expected revenue per petahash per second of hashing capability for a miner, according to the <a href="https://data.hashrateindex.com/chart/bitcoin-hashprice-index">Hashrate Index</a>.&nbsp;



Core Scientific says it operates more than 200,000 miners, 99% of which are Bitmain S19 models. The new hardware is expected to improve Core Scientific&#8217;s mining efficiency.



As of the end of August 2023, Core Scientific had a total energized hash rate of 22 EX/s per second, according to a statement. The two companies have also agreed to upgrade older Bitmain models hosted at Core Scientific&#8217;s facilities, aiming to further increase the company&#8217;s hashing power.



Core Scientific, currently in the throes of <a href="https://blockworks.co/news/bitcoin-miner-core-scientific-to-file-bankruptcy-stock-tanks-30">bankruptcy proceedings</a>, is attempting to shore up its business after being caught up in the chaos of last year’s market rout.&nbsp;



CEO Adam Sullivan, <a href="https://blockworks.co/news/core-scientific-new-ceo">recently hired in Augus</a>t, hopes to pull the company back on track and is anticipating an <a href="https://blockworks.co/news/core-scientific-new-ceo-2">exit of its bankruptcy</a> by year’s end — though no definitive timeframe has yet been given.



The Texas-based miner fell on hard times following the collapse of FTX which sent crypto prices reeling alongside a hike in operational costs, namely, rising electricity prices for crypto miners.



In a securities document dated Nov. 21, the company revealed it needed more cash to sustain operations through 2023 and expressed uncertainty about its capacity to secure financing or tap into capital markets.



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Bitcoin

Core Scientific gets $53M from Bitmain in bid to re-energize bitcoin mining business

Ben Strack

Riot Platforms is partnering with China-based bitcoin miner manufacturer MicroBT in an effort to secure an on-shore supply chain and potentially triple its hash rate.



Riot CEO Jason Les told Blockworks the deal is also a step toward more broadly bolstering the bitcoin mining industry domestically.&nbsp;&nbsp;&nbsp;



Founded in 2016, MicroBT develops and sells integrated circuits and bitcoin mining hardware under the WhatsMiner brand. It revealed a partnership with New York-based Foundry Digital in 2020 to increase its market share in North America.



The purchased MicroBT machines — to be created at a new facility in Pittsburgh — will be for Riot’s Corsicana facility in Texas’s Navarro County. Riot broke ground on the 1-gigawatt expansion project last October — slated to be bigger than its now-largest 700-megawatt Rockdale facility.&nbsp;



The initial order for the “long-term purchase agreement” amounts to 33,280 machines at a price of roughly $163 million, or $21.50 per terahash (TH). Riot has the option to buy an additional 66,560 machines before the end of 2024 at the same price.&nbsp;



MicroBT Chief Operating Officer Jordan Chen called the M56S+ and M56S++ — the models Riot ordered — “the most powerful machines we have ever developed” in a statement.



Riot has tested the machines over the past several months. Those models are designed for immersion cooling systems such as the ones to be used in the company’s Corsicana facility.



“This order will drive expansion of our operations allowing us to hire and train new staff to fulfill our growing United States-based manufacturing business,” Chen added.



<h2 class="wp-block-heading">Growing hash rate, improving logistics </h2>



Riot historically only bought large amounts of machines from MicroBT rival Bitmain, a firm also based in China.&nbsp;



The company previously had to charter jets and endure expensive shipping costs to get machines delivered overseas, Les said. The arrangement with MicroBT “de-risks the logistics,” he added, as now trucks can ship the miners from Pennsylvania to Texas.&nbsp;



“By entering this order and forming this partnership with MicroBT, we’ve now helped develop this pipeline of access to US-manufactured miners,” the CEO told Blockworks. “We think that’s great for the industry and we think that’s great for decentralization.”&nbsp;&nbsp;&nbsp;



Riot Platforms mined 676 BTC ($20.5 million) in May. It ended the month with roughly 800 miners staged for deployment — at which point the company said it was set to have 94,976 miners with a hash rate capacity of about 10.6 exahashes per second (EH/s).&nbsp;



The company was set to grow to 12.5 EH/s in the second half of 2023, it said earlier this month. But the deal with MicroBT could help Riot nearly triple that hash rate within the next two years or so.



Delivery of the 33,280 machines is expected to start in December, as deployment would follow in the first quarter of next year. Those machines would raise Riot’s hash rate to 20.1 EH/s. 



Marathon, another major US miner, <a href="https://ir.mara.com/news-events/press-releases/detail/1315/marathon-digital-holdings-announces-bitcoin-production-and" target="_blank" rel="noreferrer noopener">reported</a> 15.2 EH/s operational hash rate earlier this month, with 404.89 EH/s on the entire <a href="https://www.coinwarz.com/mining/bitcoin/hashrate-chart" target="_blank" rel="noreferrer noopener">network</a> right now.



If Riot chooses to buy the additional 66,560 MicroBT machines, its capacity is estimated to reach 35.4 EH/s. 



“We really like the product … and we really like the price of the hash rate right now,” Riot’s Les said. “While we do not have all the capital on our balance sheet to purchase [the additional] miners right now, we wanted to make sure we secured the option to.”



He added: “As we continue raising capital in the future, we’ll have the ability to put that to use at these low prices now.” &nbsp;



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ASICs

Riot inks MicroBT deal to build bitcoin miners in US — not China

<div id="highlights-block_61e748863d90e" class="highlights">
 <ul>
 <li>Intel is expected to reveal its low voltage, energy efficient Bitcoin mining ASIC next month</li>
 <li>While its possible Intel&#8217;s ASIC could see long run potential in further professionalizing Bitcoin’s mining market, entrenched players were likely to continue dominating, according to one mining expert</li>
 </ul>
 
</div>



Intel, one of the world&#8217;s largest semiconductor chip makers by revenue, is expected to unveil its bitcoin mining chip later next month in an attempt to capitalize on crypto&#8217;s booming mining sector.



The chip giant will unveil its &#8220;Bonanza Mine: An Ultra-Low-Voltage Energy-Efficient Bitcoin Mining ASIC,&#8221; according to <a href="http://submissions.mirasmart.com/ISSCC2022/PDF/ISSCC2022AdvanceProgram.pdf" target="_blank" rel="noreferrer noopener">program details</a> for the upcoming International Solid-State Circuits Conference to be held Feb. 19-26.



ASIC, or application-specific integrated circuits, refer to an integrated circuit chip designed for specific use cases. In the case of crypto mining, ASICs are designed in such a way as to more optimally solve a crypto mining puzzle through hashing power.



Intel is hoping its advance into crypto mining will help it claw back some of its lost market share after a <a href="https://www.techzine.eu/blogs/infrastructure/66919/intels-strategy-has-failed-wont-recover-until-2025/" target="_blank" rel="noreferrer noopener">disastrous decision</a> in 2014 to opt-out of extreme ultraviolet (EUV) machines used in the production process of advanced chips.



The machines that Intel decided against at the time use a laser with EUV light in the manufacturing process and allow competing manufacturers, like Taiwan&#8217;s TSMC, to create chips that can be produced at a much smaller scale than traditional means while containing more transistors per chip. Intel hopes to have its own fleet of EUV machines in operation sometime this year.



Providing the picks and shovels to miners amid another crypto bonanza has proved profitable for large players like Bitmain and Whatsminer. Intel is banking that its latest venture will allow it to buoy some of the company&#8217;s poor decisions in the past.



Depending on the month, the total profits obtained from bitcoin mining revenue sit between $1 billion to $1.7 billion or yearly revenue of around $17 billion, data from <a href="https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin/bitcoin-miner-revenue-monthly" target="_blank" rel="noreferrer noopener">The Block</a> shows. Meanwhile, <a href="https://www.investopedia.com/news/crypto-mining-giant-bitmain-going-public-4050-billion-valuation/" target="_blank" rel="noreferrer noopener">sales revenue</a> of mining rigs from the likes of Bitmain were estimated to be in the billions.



&#8220;It’s not surprising to see hardware manufacturers seek out new lines of production to increase their bottom line,&#8221; said William Foxley, media director at Compass Mining. 



Foxley also said that while it was possible Intel&#8217;s ASIC could see long-run potential in further professionalizing Bitcoin’s mining market, Bitmain, and to a lesser extent Whatsminer, would continue to be the dominant ASIC manufacturer.



&#8220;There’s simply too far a gap for players like Intel to make up,&#8221; said Foxley.



<h3 class="wp-block-heading">Ultra-Low-Voltage and Energy-Efficient</h3>



While details on Intel&#8217;s new ASIC are scant, the name suggests the chip giant is attempting to target one major area of concern in the Bitcoin mining process and increased hashing power — energy efficiency.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">3/Silicon design is too concentrated into a few companies. This means supply is likely overly constrained. Silicon development is very expensive, requires long term investment, and is best coupled tightly with software and system design. Why aren’t more companies doing this work?&mdash; jack⚡️ (@jack) <a href="https://twitter.com/jack/status/1449110245670801408?ref_src=twsrc%5Etfw">October 15, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Criticism often points to bitcoin&#8217;s energy use as an environmental hazard, though <a href="https://bitcoinminingcouncil.com/q4-bitcoin-mining-council-survey-confirms-sustainable-power-mix-and-technological-efficiency/" target="_blank" rel="noreferrer noopener">research</a> released by The Bitcoin Mining Council on Tuesday points the discussion in a different direction.



According to the research, it is estimated the sustainable electricity mix for the global crypto mining industry grew to 58.5% in Q4 2021, up 1% from the previous quarter, which made it &#8220;one of the <a href="https://twitter.com/Bitfarms_io/status/1483570431936413703?s=20" target="_blank" rel="noreferrer noopener">most sustainable</a> industries globally.&#8221;



Keeping the cost of production down is key in any market to maximizing profit, doubly so when it comes to the cost of mining cryptocurrencies. Competition is fierce, and choosing the right machines as well as locations around the world that are <a href="https://minebest.com/blog/how-big-is-the-cryptocurrency-mining-industry" target="_blank" rel="noreferrer noopener">well-suited and politically favorable</a> towards miners are the key differences between the success and failure of miners&#8217; operations.



Whether Intel can chip away at some of the entrenched players and provide a more profitable product for miners remains to be seen.



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Can Intel Chip Away at the $17B Bitcoin Mining Market With New ASIC?

Jacquelyn Melinek

<div id="highlights-block_61083c2e4f33b" class="highlights">
 <ul>
 <li>Marathon anticipates all 30,000 miners to ship from Bitmain between a six-month period from January 2022 and June 2022</li>
 <li>If all of Marathon’s miners were running today, the company’s hash rate would represent approximately 12% of the bitcoin network’s total hash rate, it said. </li>
 </ul>
 
</div>



China&#8217;s largest maker of cryptocurrency mining machines, Bitmain, has sold 30,000 miners for $120.7 million to Marathon Digital, a publicly-listed digital asset technology company that mines cryptocurrencies, according to a press <a href="https://www.globenewswire.com/news-release/2021/08/02/2272806/0/en/Marathon-Digital-Holdings-Purchases-30-000-S19j-Pro-Bitcoin-Miners-from-Bitmain.html" target="_blank" rel="noreferrer noopener">release</a> on Monday. 



Beijing-based Bitmain is no stranger to selling mining equipment. Within the blockchain mining space, it has shipped billions of application-specific integrated circuit (ASIC) miners, accounting for 75% of the global market, according to its <a href="https://www.bitmain.com/about" target="_blank" rel="noreferrer noopener">website</a>. ASIC miners are electrical circuits designed to mine bitcoins and other cryptocurrencies. 



Marathon anticipates all 30,000 miners to ship from Bitmain between a six month period from January 2022 and June 2022, it said. With the new purchase, the company’s total miners will increase about 30% to approximately 133,000 bitcoin miners, producing 13.3 EH/s, said Fred Thiel, Marathon’s CEO. 



“Increasing our percentage of total network’s hash rates increases our probability of earning bitcoin, and given the uniquely favorable conditions in the current mining environment, we believe it is an opportune time to add new miners to our operations,” Thiel said.&nbsp;



If all of Marathon’s miners were running today, the company’s hash rate would represent approximately 12% of the bitcoin network’s total hash rate, which was approximately 109 EH/s as of August 1, the company said. For reference, 1 EH/s is <a href="https://coinsutra.com/hash-rate-or-hash-power/" target="_blank" rel="noreferrer noopener">one quintillion</a> hashes per second.



“As a result, once all miners are fully deployed, our mining operations will be among the largest, not just in North America, but globally,” Thiel said. 



In general, many mining firms are moving operations from China to North America, after Beijing banned bitcoin mining in June. The “great mining migration” out of China has become a decentralizing force and drive in moving a sizable portion of mining companies to North America in search of new homes for mining facilities, Blockworks previously <a href="https://cms.blockworks.co/bit-digital-cashes-in-on-chinese-mining-exodus/" target="_blank" rel="noreferrer noopener">reported</a>. 



In recent months, Beijing called for a <a href="https://cms.blockworks.co/china-mining-exodus-seen-as-positive-for-bitcoin/" target="_blank" rel="noreferrer noopener">crackdown on China’s crypto mining industry</a>, which was home to over 65% of global mining capacity. According to reports, <a href="https://www.globaltimes.cn/page/202106/1226598.shtml" target="_blank" rel="noreferrer noopener">more than 90%</a> of China’s bitcoin mining capacity is expected to close, just weeks after the ban in <a href="https://cms.blockworks.co/chinas-qinghai-province-shuts-down-crypto-mines/" target="_blank" rel="noreferrer noopener">China’s Qinghai province</a> was announced. 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="512" height="402" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg" alt="July bitcoin hashrate" class="wp-image-6084" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg?w=512 512w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg?w=327 327w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg?w=279 279w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-8.jpg?w=80 80w" sizes="auto, (max-width: 512px) 100vw, 512px" /></figure>



Separately, the observed global hash rate for July dropped about 20% from 120.1 EH/s in June to 100.3 EH/s in July, according to Glassnode data shared in a recent report by Michael Del Grosso, a managing director at Compass Point Research &amp; Trading. A lower global hash rate essentially equates to an easier ability for existing operations to mine bitcoin, the note said.&nbsp;



Compass Point also estimates that the global hash rate will be 2% higher by the end of 2022, but wrote that their estimates might be overly conservative due to the unclear and eventual outcome from the Chinese mining displacements.



Marathon <a href="https://www.google.com/search?q=NASDAQ%3AMARA&amp;oq=NASDAQ%3AMARA&amp;aqs=chrome..69i57j69i58.223j0j7&amp;sourceid=chrome&amp;ie=UTF-8" target="_blank" rel="noreferrer noopener">shares</a> (MARA) were last trading up $1.05, or 3.8%, at 28.68 as of 2 pm ET on Monday.

Bitcoin mining

Bitmain Sells 30K Miners to Marathon Digital for $120M

<div id="highlights-block_610818d0d41c5" class="highlights">
 <ul>
 <li>As of March 2021, the company had over $10 billion in assets under management and custody and over $5 billion in average monthly trading volumes across its products, it said.</li>
 <li>The number of crypto-deals in the second quarter of this year has increased over 64% from the year-ago quarter, with blockchain funding crossing the $4 billion mark during this quarter for the first time ever, according to data from CB Insights. </li>
 </ul>
 
</div>



Singapore-based crypto financial service platform Matrixport announced it closed its $100 million Series C funding round with a valuation over $1 billion, the company said in a statement.&nbsp;



The two-year-old <a href="https://cms.blockworks.co/empowering-new-crypto-users-with-innovative-financial-products/" target="_blank" rel="noreferrer noopener">company</a> was launched in 2019 by Bitmain co-founders Jihan Wu and Ge Yuesheng and has raised $129 million to date. Its products include institutional custody, trading, lending, structured products and asset management to institutional investors and retail customers.



As of March 2021, the company had over $10 billion in assets under management and custody and over $5 billion in average monthly trading volumes across its products, it said.&nbsp;



The company reached unicorn status with its latest funding round, adding it to a list of <a href="https://www.crunchbase.com/lists/crunchbase-private-unicorn-company-list/f406c855-fff9-419b-9b44-324e1bfe3081/organization.companies" target="_blank" rel="noreferrer noopener">over 900 companies</a> with valuations of $1 billion or greater, according to data on the Crunchbase Unicorn Board. In late July, the first non-fungible token (NFT) marketplace OpenSea also reached unicorn status after raising $100 million in a Series B funding round led by a16z, which brought its valuation to $1.5 billion, Blockworks previously <a href="https://cms.blockworks.co/a16z-leads-100m-round-for-nft-unicorn-opensea/" target="_blank" rel="noreferrer noopener">reported</a>. These two crypto-companies are some of the latest organizations to join the growing list of unicorns in the global marketplace.



“I always believe an open and permissionless blockchain ecosystem is the bedrock of a new financial network that will benefit a large part of the world’s population,” Wu said. “As a result, there will be hundreds of trillions of value created, stored and transferred on this new financial network,” he added.&nbsp;



This investment round was led by partners of DST Global, C Ventures and K3 Ventures. Other participants include Qiming Venture Partners, CE Innovation Capital, Tiger Global, Cachet Group, Palm Drive Capital, Foresight Ventures and A&amp;T Capital, along with earlier investors Lightspeed, Polychain, Dragonfly Capital, CMT Digital and IDG Capital.



The funding will be used to further invest in research and development to improve its product offerings and security for a better user experience, it said. The funds will also be used to support global expansion and secure licenses to operate in more jurisdictions to allow more users globally to use its platform. Although the company is based in Singapore, it currently has licenses in Hong Kong and Switzerland and serves institutions and retail investors in Asia and Europe.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="498" height="418" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg" alt="Blockchain funding" class="wp-image-6070" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=498 498w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=306 306w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=80 80w" sizes="auto, (max-width: 498px) 100vw, 498px" /></figure>



In general, there has been a large influx of investments and deals being closed in the crypto space. The number of crypto-deals in the second quarter of this year has increased over 64% from the year-ago quarter, with blockchain funding crossing the $4 billion mark during this quarter for the first time ever, according to data from CB Insights.&nbsp;



“As blockchain based digital assets gain wider adoption and acceptance, new pathways are needed to capture yield, source liquidity and manage crypto assets as an emerging asset class,” said Adrian Cheng, an investor in the round and founder of C Ventures and CEO of New World Group.&nbsp;



In 2020, Bloomberg <a href="https://www.bnnbloomberg.ca/singapore-crypto-startup-seeks-to-triple-value-to-300-million-1.1399864" target="_blank" rel="noreferrer noopener">reported</a> that the company was seeking to raise $40 million in a funding round with a valuation of $300 million. In 2019, the startup took in around $8 million in revenue and expected to more than double that in 2020, according to a slide deck shared with investors and viewed by Bloomberg.