December 13, 2021 -- InvestorsHub NewsWire -- via NetworkNewsWire
Editorial Coverage: Investors understand that, for a variety of
reasons, volatility is part-and-parcel to investing in
cryptocurrencies. For Bitcoin, the most popular of all digital
currencies, a finite supply and the nascency of the market are key
contributors to volatility that can test a small-retail investor’s
resolve. The reality is that volatility is not a bad thing—in fact,
it is rather instrumental in the making of any market. A month ago,
Bitcoin was setting a new record high at $68,978, leading a
cryptocurrency market that topped $3 trillion in valuation for the
first time. Against that backdrop, companies continue to invest and
innovate, looking for ways to mine more Bitcoin and widen margins,
whether it be through scale, technology or other
means. ISW Holdings Inc. (OTC: ISWH)
(Profile) is actively engaged in
expansion of both its segments, as the company emerges as one of
the largest mining and hosting providers in the North America
digital currency space. Broadly speaking, there has been no
shortfall of positive developments in the cryptocurrency sector,
where companies such as Marathon Digital Holdings
Inc. (NASDAQ:
MARA), CleanSpark
Inc. (NASDAQ:
CLSK), Riot
Blockchain Inc. (NASDAQ:
RIOT) and Bitfarms Ltd. (NASDAQ:
BITF) continue to lead the charge.
- Phase 1 of ISW Holdings’ Pod City is nearly complete as part of
a larger complex that will pair 56,000 Bitcoin miners to 200
megawatts of power.
- Power and infrastructure equal revenue and cash flow that allow
ISWH to utilize opportunity zones that are the center of its
success.
- ISWH is actively adding to its asset base, which increased by
550 miners and generated $1.075 million during Q3.
- Once Pod City is running at full capacity, the company
estimates annual revenue of almost $7 million per month via hosting
contracts.
Click here to view the custom infographic of
the ISW Holdings Inc. editorial.
The Problem of Power
Bitcoin miners are those people and companies that earn
cryptocurrency by using computing power to solve complex algorithms
to create new blocks of data that are added to the global
decentralized ledger known as the blockchain. The blockchain is
deemed immutable because of its decentralized nature. In the
blockchain every block is dependent on every other block for
continuity, meaning not one component can be changed without
immediately throwing up a red flag to the rest of the
blockchain.
Every crypto miner faces the same challenge: power consumption.
The banks of computers solving algorithms consume massive amounts
of energy to run full bore 24/7/365, which has companies looking at
every possible way to contain costs. To lend some color to the
expense involved, consider that, in aggregate, the Bitcoin industry
uses approximately 91 terawatt-hours of electricity annually.
That’s more
than the entire country of Finland.
ISW
Holdings Inc. (OTC:
ISWH), which is in the midst of a name change to
BlockQuarry, is a Nevada-based portfolio company with primary
commercial-stage operations in cryptocurrency mining. The flagship
asset of ISWH is its Pod City complex that, when complete, will
pair 200 megawatts (“MW”) of power with 56,000 crypto mining rigs.
In addition to running its own operations, ISWH is a hosting
service that provides all the requisite equipment and know-how for
clients hoping to enter the crypto mining space.
To move the project forward, ISW Holdings partnered with some of
the biggest names in the business, including the world’s
leading producer of cryptocurrency mining hardware and
Bit5ive, a leading global cryptocurrency mining firm. ISWH
partnered with Bit5ive in May
2020 to build and deliver a powerful and efficient data
center pod design. The Pod4 and Pod5 datacenters, which ISWH brands
as BloqPod, were the result, which explains the inaugural project’s
name.
With the Pod City project making substantive progress, ISWH is
generating higher revenue than last year. At this point, the
company finds itself in a position where power and infrastructure
equals revenue and cash flow, which allows ISW Holdings to utilize
the opportunity zones that are the center of its success in hosting
and mining.
Phase 1 Completion Looming
In the grand scheme of things, ISWH probably couldn’t have
picked a more challenging time to construct Pod City, with the
COVID-19 pandemic striking only months after the Bit5ive joint
venture, causing global supply chains to grind to a halt. The
BloqPods that are the lifeblood of Pod City are turnkey, bespoke
40-foot ISO modular containers that use clean, renewable energy and
accommodate 1+ MW of crypto mining power each with components
sourced from around the world and manufactured in America.
A BloqPod has 280 Antiminer S19J machines with a
capacity of 28,000 TH/s and daily potential to mine 0.1576 BTC. At
$50,000 BTC, that’s $7,880 per pod per day. At 200 pods, that’s
$1.58 million daily, or $575.24 million annually.
Despite all the headwinds, Pod City has moved forward at a
remarkable pace, which speaks volumes about ISWH’s partners and
access to infrastructure development and mining equipment. The
company said earlier
this month that phase 1 of the project is nearly complete:
this phase constitutes the infrastructure build-out to deploy 20 MW
of power to the self-contained cryptocurrency mining pods. The
company is on schedule to have all 56,000 miners hooked up to all
200 MW of power and running during Q4 2022.
In the (Opportunity) Zone
Speaking about phase 1, Larry Sossamon, president of Sossamon
Construction Co. which is working with Bit5ive to build Pod
City, commented that the project will “create many new
jobs and new opportunities in the area.” The company looks to
capitalize on federal incentives to invest in distressed areas in
the United States, dubbed “opportunity
zones.” The purpose is to spur economic growth and job creation
in low-income communities while providing tax benefits to
investors, a win-win for all involved.
To the point of governments, ISWH’s relationships with
municipalities is part-and-parcel to the success of its projects.
Consider that the efficiency and design of the pods overcome the
three barriers to entry in the BTC mining business: equipment,
storage and energy. Through partnerships with municipalities, ISWH
and Bit5ive have access to low energy rates that facilitate viable
operations.
Higher Revenue Reported Ahead of Pod City
Launch
Developments are translating to revenue and cash flow, resources
that will underscore growth in 2022 and beyond with Pod City and
other hosting and mining operations. During Q3, ISWH reported
revenue from operations of $1.075
million (including deferred revenues), up 2,435% on a
year-over-year basis. That didn’t include a full three months
of 550 new miners acquired from
Minerset, 150 of which came as a result of IWSH meeting
stock performance milestones. Total assets during Q3 increased
5,263% year to date to $9.56 million, while total liabilities
decreased 73%, and total derivative liabilities decreased 98% to
under $340,000.
Revenue and cash flow should continue to increase based upon
ISWH getting more miners up and running. The company is currently
running 700 miners, representing a mix of Bitmain Antminer S17s,
BitMain S19 95TH/s and Canaan Avalons running in POD5 units in
Pennsylvania at a site managed by Bit5ive. Based upon hashrate
capacity and a three-month trailing average pricing of Bitcoin,
these units have annual revenue capacity of up to $6 million.
Looking ahead, revenue at Pod City will be comprised of hosting
service fees, which aren’t contingent upon cryptocurrency pricing.
Once running at full capacity, the company estimates annual revenue
in excess of $7 million per month, a tremendous improvement
compared to current capacity with the benefit of being recurring
under service contracts.
Mining for Something Better Than Gold
While Bitcoin prices ride up and escalator, activity in the
cryptocurrency sector abounds. Appetite is evidenced from multiple
view, including a CNBC survey showing that more than one in ten
respondents are now investing in cryptocurrency. From the corporate
perspective, companies are steadily pushing out news lending
credence to market growth.
Marathon
Digital Holdings Inc. (NASDAQ:
MARA), a digital asset technology company that mines
cryptocurrencies with a focus on the blockchain ecosystem and the
generation of digital assets, received
approximately 15,520 top-tier ASIC miners from Bitmain
during November, resulting in 56,826 miners year to date with an
additional 8,477 miners currently in transit. As of December 1,
2021, Marathon’s mining fleet has produced approximately 2,712.3
self-mined Bitcoin during 2021.
CleanSpark
Inc. (NASDAQ:
CLSK) is a sustainable Bitcoin mining and energy
technology company that is solving modern energy
challenges. In
November, the company purchased 2,597 Antminer S19 bitcoin
mining machines, in addition to 2,711 already being delivered
during the month as it looked to take advantage of spot market
prices. During 2021, CleanSpark deployed a fleet of approximately
12,900 latest-generation Bitcoin miners with a total hashrate of
1.3 EH/s.
Riot
Blockchain Inc. (NASDAQ:
RIOT) focuses on mining Bitcoin and, through
subsidiary Whinstone, hosting Bitcoin mining equipment for
institutional clients. The company is expanding and upgrading its
mining operations through industrial-scale infrastructure
development and latest-generation miner procurement. In November
2021, Riot produced 466 BTC, an increase of approximately
298% over its November 2020 production of 117 BTC.
Bitfarms Ltd. (NASDAQ:
BITF) is a global Bitcoin self-mining company,
running vertically integrated mining operations with onsite
technical repair, proprietary data analytics and company-owned
electrical engineering and installation services to deliver high
operational performance and uptime. Each Bitfarm facility
is more than
99% powered with environmentally friendly hydropower and
secured with long-term power contracts.
Back in the day when Bitcoin was trading at $1,000 or so,
volatility could be devastating to a miner, but with prices now
ranging from $20,000 to $50,000 and more, there is plenty of margin
available, particularly for companies that have learned how to
contain costs. Competition has run out most of the small players,
with more stable companies jockeying for position, looking for
growth opportunities owing to volatility, rather than being fearful
of it.
For more information about ISW Holdings
Inc., please visit ISW
Holdings Inc.
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