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If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet. At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. “Rather than incremental energy production, we reduce our load giving power back to the grid, which is more cost effective and efficient than spinning up additional energy reserves,” Liska added. Riot Blockchain is among the companies on storm watch and looking to help protect the state’s power grid. Finance Magnates is a global B2B provider of multi-asset trading news, research and events with special focus on electronic trading, banking, and investing.
Whinstone’s facility has a power capacity of 750 MW, with 300 MW currently developed, an important asset for energy-intensive Bitcoin mining. The crypto miner said Wednesday that it would purchase 42,000 S19j Antminers for $138.5 million from Bitmain Technologies. The mining facility hosts three institutional clients and will hit 300 megawatts in developed capacity by the end of 2021. The company has an “attractive long-term power purchase agreement” as well and Riot hopes to push the facility’s power capacity to 750 MW in the coming years.
An influx of interest from https://cryptominer.services/currency businesses does not come without risk, though. Bitmain, a China-based company, said in 2018 that it would invest $500m to build a huge mining facility in Rockdale, bringing jobs to a community that has seen huge job losses after a coal plant closure in 2008. But after the price of bitcoin dropped to just over $3,000 in the fall, the company pulled out of the project. Also making the state attractive to miners is that 20% of its energy comes from wind power, making mining in Texas a much greener alternative than mining in China, where about two-thirds of electricity comes from coal. Tesla’s CEO, Elon Musk, halted his company’s acceptance of bitcoin transactions, citing the “rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”. Musk said that Tesla will resume accepting bitcoin once there’s confirmation that about half of the energy used by miners will be from clean energy.
- In a recent interview, Stallman said that he is “very interested” in these technologies and is currently studying them.
- Therefore, Whinstone’s existing capacity could be occupied in its entirety, signaling a need to expand the data center campus.
- Upon the closing of this acquisition, Riot is expected to be the largest publicly-traded Bitcoin mining and hosting company in North America, as measured by total developed capacity.
- According to the Chief Executive Officer of Riot Blockchain, Jason Les, the company plans to make Whinstone the foundation of its Bitcoin mining operations upon which its global mining expansion goals would be.
- Speaking of the financial details of the deal, $80 million of $651 million will be paid in cash, with the remainder in the form of 11.8 million shares of Riot common stock.
“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. Harris estimates that on day one, they had 300% more capacity than Bitdeer. 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.” “They have money. They have equipment. They just need a place – and power, quick,” said Gibson. “Miners are committed to buying a certain amount of power and what they do is they sell it back at market and make a profit,” explained King.
The https://cryptonews.wiki/ is still in its early stages, but it has already attracted a lot of interest from the cryptocurrency community. Ripple, the global payment network, today announced a partnership with MoneyGram. The agreement will see MoneyGram become the first financial institution to use Ripple’s blockchain technology to help speed and reduce the costs of international money transfers. “Instead of lasting three years, the machines can last five years,” says Harris. “You’re depreciating them over longer periods, lowering capital costs.” Second, the process can greatly raise the hashrate for the same ASIC miners.
The move to acquire Whinstone comes after Riot announced it picked up an additional 42,000 S19j Antminers from Bitmain for $138.5 million on Wednesday. “The Rockdale economy was devastated for several years until the bitcoin miners showed up,” said Bratcher. Mayor King says today’s arrangement between miners and ERCOT is pretty simple and mutually beneficial. According to a press release from Northern Data, the deal is worth €67 million cash ($80 million) plus 12% of Riot’s shares, worth upwards of $570 million. Riot Blockchain will take control of Whinstone’s planned mining operations in Texas. Riot Blockchain has purchased Whinstone Inc., which last year began building what it hopes will be the largest data center in the world.
Whinstone has mushroomed to become for Bitcoin mining what VW’s Wolfsburg plant and Boeing’s Everett factory are to cars and airplanes. The Whinstone US plant already harbors 400 megawatts in electrical capacity; that’s almost twice the juice powering downtown Dallas. As for Harris, the flamboyant serial entrepreneur had long careened from coups to flops on the wildest of roller-coaster rides, and his steep slide now mirrored Rockdale’s. The mid-Texas outpost was an odd place for New Orleans native Harris to be seeking financial redemption. In fact, he’d never before set eyes on the rural stretches of the Lone Star State.
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. 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. 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.
Whinstone is based in Rockdale, Texas and its facility is located on an 100-acre site, hosting Bitcoin mining customers in three buildings totaling 190,000 square feet. The site is subject to a long-term lease agreement, with electricity provided via a long-term power supply contract. Riot will be able to continue rapidly scaling its self-mining business with Whinstone’s industry-leading team. The Whinstone team is comprised of approximately 100 employees who have built Whinstone’s Texas operations from greenfield to commercialization in less than twelve months. The talented Whinstone team, combined with the facility’s substantial expansion capacity significantly de-risks Riot’s future operational and financial growth. Starting in early 2020, Whinstone built the largest bitcoin hosting facility in North America, as measured by developed capacity, Riot said.
North America’s Largest Bitcoin Mining Facility
Along with the price of Bitcoin, mining operations have been steadily on the rise. As more Bitcoin miners enter the space, the overall hash rate is expected to rise. Speaking of the financial details of the deal, $80 million of $651 million will be paid in cash, with the remainder in the form of 11.8 million shares of Riot common stock. After the deal closes, Northern Data will own a total of 12% of the outstanding common stock of Riot Blockchain.
To manage the digital infrastructure, Whinstone has a team of 100+ employees. Indeed, this team brought Whinstone’s Texas data center from greenfield project to commercialization. Riot acquired the Whinstone mine earlier this year for $80 million plus stock, 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. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
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Dickens county, population 2,300, “is mostly improved pasture and grassland”, Brendle said. Today, Bratcher estimates that Texas is marshaling 900 to 1,100 KWh to produce Bitcoin. They’re not growing, and we’re growing like crazy.” Within two years, Bratcher expects Texas to reach 3,000 to 4,000 KWh. Even so, at Bratcher’s high figure of 4,000 MWh, Texas would be home to almost 25% of the global industry. If the ERCOT estimate plays out, Texas could be making one-third of the world’s Bitcoin.
“They have a contract of two cents or three cents…and they can sell it for $9 a kilowatt hour.” 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.
In an interview with Cointelegraph, software freedom activist Richard Stallman spoke about the potential of cryptocurrency and blockchain technology. He said that he is “not very optimistic” about the short-term prospects of cryptocurrency, but he is hopeful that in the long-term it could help to reduce the concentration of power in the hands of central authorities. He also praised the Taler digital currency project, which is working on a blockchain-based solution for payment processing. The Riot Blockchain Inc. cryptocurrency mining firm is buying Whinstone U.S. Inc. for roughly $651 million in cash and stock. Mining facilities can set up long-term contracts with power providers that allows them to purchase electricity at a fixed price for many years, says Jason Les, CEO of Riot Blockchain, a US-based cryptocurrency mining company.
Hundreds of machines more powerful than the average computer will soon be housed in this 320-acre mining facility in Dickens county, where they will work day and night to solve a complex series of algorithms. If successful, the reward will be newly minted bitcoin, currently worth about $44,000 each. Across the road in Rockdale, at the old Alcoa smelter site, stands a mine owned by Bitdeer of Singapore.
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In an interview with Cointelegraph, Richard Stallman, the founder of the GNU Project, spoke about his views on cryptocurrency, blockchain technology and privacy. He said that he is not a fan of cryptocurrency because it is based on “trust in math” rather than trust in people. However, he said that he is interested in blockchain technology and thinks it has the potential to help reduce centralization. He also said that he is concerned about privacy and thinks that the Gnu Privacy Guard tool can help people protect their privacy. Arizona State University, one of the world’s leading research universities, has partnered with blockchain technology firm, Ripple, to study the potential applications of blockchain technology.
In January of 2021, billionaire Jihan Wu split Bitdeer from Beijing’s Bitmain, the giant producer of mining equipment that Wu co-founded. In January, Wu announced plans to take Bitdeer public through a spac at a $4 billion valuation. Bitdeer owns five facilities in the U.S. and Norway, but the Rockdale farm is the biggest. HB 4474 recognized cryptocurrency in the state’s Uniform Commercial Code in an effort to set standards that clarify the rights of people who control the currency and make it possible to resolve disputes over ownership. The measure made Texas the third state to amend the laws regulating financial transactions as such.
Meet the ‘King of Bitcoin Mining’—an ex-landscaper who is building crypto’s promised land in Texas
Two weeks after the groundbreaking ceremony, in mid-November of 2019, the https://currency-trading.org/ agreed to sell Whinstone to Northern Data in an all-stock deal that, by the closing in February of 2020, was worth $164 million. Northern Data recognized that the New Orleans founders were as essential as steel and transformers to building the giant project, and left the full team in place. In early April of 2021, with Bitcoin cresting at over $60,000, Riot agreed to buy Whinstone for multiples of what Northern Data had paid. The original idea was to build a facility from scratch where Harris would host the Japanese client and other third parties. The team wanted to acquire the HODL Ranch location, which had power to the site, in Pyote, west of Midland. In early July, three days after the HODL foray failed, Harris read a story in Wired called “The Hard-Luck Texas Town That Bet on Bitcoin—and Lost,” about Rockdale’s travails.
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The acquisition of Whinstone is a strategic move for Riot and its shareholders as this will allow Riot to become the largest mining firm in America. Furthermore, average renewable power generation for the entire ERCOT region was just under 40% for 2021. The vast majority of renewable power in Texas is generated from large wind farms in west Texas and the northern panhandle region. While some of this west Texas wind power likely makes its way to central and eastern Texas , most of this power is likely consumed at higher demand centers in more metropolitan areas west of Rockdale. It is highly unlikely that RIOT’s Whinstone facility captures the ERCOT-wide average of 40%. “The acquisition of Whinstone is the most significant achievement in Riot’s growth to date and positions Riot as an industry leader in Bitcoin mining,” said Jason Les, CEO of Riot.
Specifically, this includes revenue from the fabrication and deployment of immersion cooling technology for Bitcoin mining. 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.
Crypto Mining Firm Riot To Acquire Whinstone For $651 Million
“I ordered tons of them in August of 2019 before we even had a lease from Alcoa. But it worked.” He’s also built a reputation for paying suppliers right on time, or even in advance. “We make sure they’re not using their own money to support our project,” he notes. “We buy materials for them all the time that they normally have to buy for themselves. Our greatest skill is sending money to contractors as fast as we can.” For Harris, the payoff is that during the pandemic shortages, loyal suppliers tended to fill Whinstone’s orders first, a benefit that continues to this day.
Once fully implemented, 95% of Riot’s fleet of about 81,150 Antminers, will consist of the latest generation S19 model. Riot’s acquisition of Whinstone will more than enable it to fulfill that capacity. In 2017, Harris, Lyle Theriot, a then 27-year-old CrossFit gym owner who’s now Whinstone’s COO, and Ashton, who’d left college as a freshman, built a tiny pilot project deploying 300 computers.
Coal and natural gas account for 38% and 36% of power sources, respectively. The advocacy group Environment Texas has opposed politicians’ efforts to promote the industry, both for power capacity concerns and because of the emissions created by producing power to sustain the miners. The increased demand brought by mining could incentivize new sources of power to come online, they say. Bitcoin mining is not continuous, said Lee Bratcher, president of the Texas Blockchain Council. The mines can be turned off at times of high strain on the grid — and ERCOT actually pays bitcoin mining companies to cease activities in these moments.
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