NetworkNewsWire
Editorial Coverage: Cryptocurrency mining, where banks of
specialized computers rush to solve complex algorithms and build
data blocks of transaction activity on the blockchain to earn
cryptocurrency, is energy intensive, to say the least. From the
outset, China kept a stranglehold on the market owing to abundant
and cheap energy, including in the coal plant hubs of inner
Mongolia and Xinjiang, resulting in more than half of the world’s
mining activity occurring in the country. However, Beijing is
facing pressure to control carbon emissions, and it is pointing its
finger directly at cryptomining for its failure to meet targets. To
that end, Chinese regulators have taken unprecedented action in
shutting down crypto miners, shining a spotlight on cleaner energy
solutions, like those offered by ISW Holdings Inc. (OTC:
ISWH) (Profile), which just got a head start in a
race for power in the United States. The Chinese shutdown also
means that all those coins that would have been mined by Chinese
firms are up for grabs, which is good news for ISWH and crypto
miners such as Marathon
Digital Holdings Inc. (NASDAQ: MARA), CleanSpark Inc. (NASDAQ: CLSK),
Riot
Blockchain Inc (NASDAQ: RIOT) and Bitfarms
Ltd. (NASDAQ: BITF).
- ISWH formed a JV with Bit5ive, North America’s largest provider
of collective management services and official distribution partner
of industry juggernaut Bitmain.
- ISWH expanded into Georgia with land lease development
agreement that includes first-phase, seven-acre property tailored
for cryptocurrency mining operations.
- Phase 1 includes 20 megawatts deployed across 20 of
latest-generation, 1-MW POD5 units expected to initially generate
$10 million in annual revenue.
- The complete project is targeting 100 MW that will generate in
excess of $100 million per annum.
Click here to view
the custom infographic of the ISW Holdings
editorial.
North America Will Dominate Cryptomining
Market
With Bitcoin prices exploding from around $157 in 2015 to a high
of almost $65,000 this year, crypto mining competition has become
intense, as evidenced by the explosion of hashrate, mining
nomenclature for aggregate Bitcoin computing power worldwide. The
forced mining
exodus in China resulted in hashrate plunging to a one-year
low, as Chinese companies packed up their machines to head for
different countries.
Lower hashrate, effectively less competition, equates to higher
revenue and profits for miners. Ultimately, the hashrate will
continue to eke back upward as, much like the digital ledger
tracking Bitcoin transactions, the marketplace becomes more
decentralized. Estimates are that Beijing’s crackdown will slash the
country’s mining capacity by 90% with North America expected to
become the dominant crypto mining market.
ISW Holdings
Inc. (OTC: ISWH) is a diversified portfolio company specialized
in strategic brand development, early-growth facilitation and brand
identity. The Nevada-based company has a healthcare division
focused on telehealth and a partnership with Bengala Technologies
for innovations in the supply chain management space,. In addition,
last year ISWH teamed up with Bit5ive LLC on a mission to mine
cryptocurrency with zero carbon footprint. With consideration for
the significant shift in mining activity that is underway, the
joint venture between ISWH and Bit5ive couldn’t have been timed
better.
Bit5ive, North America’s largest provider of collective
management services and mining equipment, is an official
distribution partner of Bitmain, the world’s top provider of
cryptocurrency mining equipment. Further, Bit5ive produces POD5
mining centers and Power Skid 2.5, which together represent the
most efficient cryptocurrency mining infrastructure solution
available on the market today.
$5.8 Million in Revenue
The JV with Bit5ive didn’t take long to produce tangible
results. Forged in May 2020, the partnership produced ISWH’s first
POD5 by December. The POD5 features a fleet of
Bitmain Antminer s17s, recognized as some of the more powerful
cryptomining machines today, although they’re not without some
technical challenges, according to Bit5ive founder Robert Collazo.
Currently, hashing is ready to begin any day.
In May, Alonzo Pierce, president and chair of ISW Holdings,
commented
that internal analysis showed that the company can turn a profit at
the Pennsylvania facility with Bitcoin pricing “above the low
$20k’s.” Even with the recent correction as market participants
fret over Beijing’s negativity towards crypto, Bitcoin is still
more than $32,000 per coin.
The hashrate at the project has been increased to 54,000 Th/s
(terahashes per second). The POD5 is expected to generate more
than $500,000 per month in revenue, or approximately $5.8
million annually. As hashrate is maximized, Pierce forecasts a
reduction in proportional direct costs associated with mining
operations, spearheaded by the expertise of the Bit5ive team to
make optimization tweaks.
Ramp to $100 Million in Revenue
This month, ISWH expanded into Georgia with the finalization of
a land lease development agreement. The agreement grants ISWH
full use of a first-phase, seven-acre parcel of property tailored
for cryptocurrency mining operations, complete with access to
energy resources capable of powering over 100 megawatts ("MW") of
mining capacity. Phase 1 will consist of approximately 20 MW of
power deployed across 20 of the latest-generation 1-MW POD5 units
expected to initially generate $10 million in annual revenue.
“This agreement puts us in position to scale up into a top-five
global cryptocurrency mining position by volume,” said Pierce.
Regarding companies emigrating from China, Pierce notes that ISWH
is already taking calls from companies looking for a scalable new
home. He added that the goal is to execute on a strategy to deploy
100 MW that will generate $100+ million per annum.
POD5s, Pools and Plans
Visually, POD5s are similar to a high-tech shipping container. A
closer look shows they are cutting-edge technology systems
including racks of customized Bitmain computers utilizing renewable
energy resources built on high-resistance steel. The result are
units that maintain a favorable year-round climate with efficient
electricity, making it a suitable structure for harsh environments
at a much lower cost and faster build out.
The first generation POD was developed in 2017, while gen 3 was
produced in 2020. With its new larger facility now operational,
Bit5ive has a target of adding 100 new POD5s to its portfolio by
the end of the year.
Going forward, the partners intend to join a mining pool, a
group of miners that share processing power over a network to
maximize profits. Bit5ive obviously has a close relationship with
Bitmain, so its Antpool is a possibility, but there are many to
choose from that have potential to benefit from the JV’s assets. In
a Waypoint podcast, Bit5ive owner Collazo opined that there is no
longer value in tackling mining individually because of the poor
risk/reward dynamics. “We will definitely be using a pool. There is
no doubt about that,” he said.
Grocers Aligned to Eliminate Food Waste
Still in its nascency, cryptocurrencies can be quite fickle, as
with almost any emerging market. The news of China’s crackdown was
inevitable, as Beijing never really got behind the industry. As it
happens, it catalyzed a pullback in Bitcoin and altcoins (any
crypto not named Bitcoin), which is a normal part of a healthy
market.
Marathon Digital
Holdings Inc. (NASDAQ: MARA), one of the largest
enterprise Bitcoin self-mining companies in North America, will be
looking to guzzle up some of the coins available from shuttered
Chinese miners. The company has already been on a roll and
ratcheting-up capacity. As of July
1, Bitmain delivered about 18,702 S19 Pro ASIC miners to
Marathon’s facility in Hadin, MT. The company’s active fleet is
nearly 19,400 miners that produced 265.6 new minted bitcoins during
June, increasing total bitcoin holdings to approximately 5,784.
CleanSpark Inc. (NASDAQ: CLSK) is a
diversified company with a suite of software solutions for
microgrid energy modeling, energy market communications and energy
management solutions, as well as being an environmentally conscious
Bitcoin miner. The sources of power for the company’s mining
facility are comprised of nuclear power, hydroelectric power and
solar, resulting in 95% of the electricity utilized for mining to
qualify as carbon free, which it is working to boost to 98%.
In April,
CleanSpark disclosed agreements to purchase 22,680 Bitmain S19j Pro
and S19 miners in a bid to increase its total hashrate capacity to
more than 1.1 EH/s (exahashes per second) by summer.
Riot Blockchain
Inc (NASDAQ: RIOT), which focuses on mining Bitcoin
and hosting Bitcoin mining equipment for clients at its operations
in Texas and upstate New York, recently completed its $80-million
acquisition of Whinstone US from Germany-listed Northern Data.
Riot plans to immediately commence further development of
additional facilities at Whinstone’s Texas facility in order to
bring the property from 300 MW currently to capacity of 750 MW. The
operations will add to Riot’s Bitcoin haul that totaled 227 in May
and 924 for the year through May.
Bitfarms
Ltd. (NASDAQ: BITF), a green cryptocurrency miner with
five industrial-scale facilities located in Québec, is the newest
NASDAQ-listed crypto play, joining the exchange on June 21, 2021.
Since starting its Bitcoin Inventory Pilot Program in early January
2021, Bitfarms has been adding almost all newly mined Bitcoins to
its balance sheet to the tune of 1,114 mined Bitcoin through June
9. Since its founding in 2017, Bitfarms has mined over 11,300
Bitcoin with 100% renewable hydropower.
As it happens, the news from China shocked the market, but it
didn’t change the trajectory for digital currencies in the grand
scheme of things. No one in the market seems rattled about it and,
fact is, it has afforded a rare opportunity for expeditious growth
for companies big and small as outsiders matriculate to the U.S.
and Canada.
For more information about ISW Holdings Inc.,
please visit ISW Holdings
Inc.
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