More Efficient, Lower Power Costs Increasing Value of Digital Mining Operations

 Power is King now a days while Digital Mining isn’t created for free, the computer-based miners that create it use vast quantities of electrical power in the process.

Cryptocurrencies are mine (i.e. “created”) by people around the world trying and solve the same mathematical puzzle using computers.

About every 10 minutes, someone solves a puzzle and is rewarded with some type of cryptocurrency.

Then, a new puzzle is generated, and the whole process starts over again.

A recent article asked: So how much electricity does a bitcoin take to produce?

Written testimony presented to the U.S. Senate Committee on Energy and Natural Resources in August 2018 claims that bitcoin mining accounts for about 1% of the world’s energy consumption.

As more people learn about cryptocurrencies and mining—and as the cryptocurrency price increases—more of them are using their computers to mine.

As more people join the network and try to solve these math puzzles, you might expect each puzzle to be solved sooner, but cryptocurrencies are not designed that way.

The software that mines bitcoin is designed so that it always will take 10 minutes for everyone on the network to solve the puzzle.

It does that by scaling the difficulty of the puzzle depending on how many people are trying to solve it.

In other words, although the time taken to produce a bitcoin doesn’t vary, the computing power used to produce it does.

As more people join the bitcoin network and try to mine bitcoins, the puzzles become harder, and more computing power and electricity are used for each bitcoin produced.

Active companies in the markets this week include Marathon Patent Group, Inc., LINK GLOBAL TECHNOLOGIES INC., Riot Blockchain, Inc., Quanta Services, Inc., HIVE Blockchain Technologies Ltd.

The mining of cryptocurrencies and the underlying blockchain technology presents both challenges and opportunities to the miners and energy sector.

As interest in cryptocurrencies has increased, the energy demand to support cryptocurrency “mining” activities has also increased.

The increased energy demand—when localized—can exceed the available power capacity and increase customers’ electricity rates.

On the other hand, not all cryptocurrencies require energy-intensive mining operations. Some cryptocurrencies can operate under algorithms that require less energy.

According to an article in The Balance: There are lots of different bitcoin mining computers out there, but many companies have focused on Application-Specific Integrated Circuit (ASIC) mining computers, which use less energy to conduct their calculations.

Mining companies that run lots of ASIC miners as businesses claim to use only one watt of power for every gigahash per second of computing performed when mining for bitcoins.

If this information is correct, the bitcoin network in 2020 consumes 120 gigawatts (GW) per second. This converts to about 63 terawatt-hours (TWh) per year.

This staggering amount of power is the equivalent of 156 million horses (1.3 million horses per GW) or 49,440 wind turbines (412 turbines per GW) generating power at peak production per second.


LINK GLOBAL TECHNOLOGIES (“LINK” or the “Company”) announces that it has received a security deposit (the “Deposit”) in the amount of US$1 million on the signing of a Power Supply Agreement (the “Agreement”) with an arm’s length third party private investment fund (the “Client”).

Under the terms of the Agreement, the Company has agreed to supply the Client with SmartMiner computing power generated by Asics processors, configured for the purpose of supplying process computing power that meets the needs of digital currency software, in exchange for cash consideration at an agreed upon rate of kilowatts per hour.

The Company has agreed to deploy the Deposit to enter into third party agreements as may be necessary such that the Company will be able to supply to the Client the computing power noted above.

The Company has agreed to return an amount equal to the Deposit to the Client in 12 equal monthly installments of US$83,333.

The term of the Agreement is twelve months.

As previously announced on March 24, 2020, Link has secured up to 50 megawatts (MW) of electricity for its cryptocurrency mining community under a letter of intent with its partners in Alberta, allowing for 15,000 new generation machines.

This program plans on using approximately 3 MW of electricity.

Stephen Jenkins, Link President & CEO

Stephen Jenkins, Link President & CEO, comments “Link is extremely pleased with the signing of this Power Supply Agreement and securing the US$1 million required to execute the plan.

This is the first commercial power supply agreement for our Alberta assets, and a key milestone that puts the Company on track to achieve profitability.

Our team continues to execute on our core strategy of securing low cost, reliable power and supplying our partners with smart infrastructure and cost-efficient power solutions for their data hosting and digital mining operations.

As we continue to acquire and expand our power assets, we are focused on securing new partnerships to facilitate the Company’s global expansion.”

Other recent developments in the markets this week include:

Riot Blockchain, Inc. recently announced continued improvements and optimization of its bitcoin (“BTC”) production, via the relocation of its 4,000 Bitmain S17 Pro miners from Oklahoma City to Coinmint, LLC’s (“Coinmint”) facility, in Massena, New York.

The Company also announces corporate updates and its BTC production update for the month of May 2020.

As previously disclosed on April 14, 2020, Riot entered into a colocation agreement with Coinmint.

The transition to Coinmint is an important part of Riot’s focus to improve its production cost efficiencies and mining output.

The Coinmint energy pricing and hosting arrangement is expected to significantly decrease the direct cost of BTC production as compared to Riot’s Oklahoma City operation, while also appreciably increasing mining uptime.

Additionally, Riot now has a clear path forward to continue expanding its total hashing capacity.

Quanta Services, Inc. recently announced that its Board of Directors has declared a quarterly cash dividend to stockholders of $0.05 per share.

The dividend is payable July 15, 2020, to stockholders of record on July 1, 2020.

Quanta Services is a leading specialized contracting services company, delivering comprehensive infrastructure solutions for the utility, pipeline, energy and communications industries.

Quanta’s comprehensive services include designing, installing, repairing and maintaining energy and communications infrastructure.

With operations throughout the United States, Canada, Australia and select other international markets, Quanta has the manpower, resources and expertise to safely complete projects that are local, regional, national or international in scope.

Marathon Patent Group, Inc. recently announced the purchase of an additional 500 of the latest generation Bitmain S19 Pro Miners.

These 500 miners will produce 110 TH/s and generate 55 PH/s (petahash) of hashing power, bringing the Company’s total Hashrate to approximately 240 PH/s when fully deployed.

This compares to the Company’s previous S-9 production of 46 PH/s. The purchase price paid was $1,190,000. The Company expects to take delivery of these latest units by the end of September.

On May 11, 2020, Marathon announced the purchase of 700 M30S+ (80 TH) miners which now have been fully installed and are operational.

On May 12, 2020, the Company announced the purchase 660 Bitmain S19 Pro Miners followed by the announced purchase of an additional 500 on May 19, 2020.

Today’s announcement of the purchase of an additional 500 S19 Pro Miners brings the total state of the art, next generation miners purchased in the past month to 2,360 units.

The Company is expecting delivery and installation of 1,160 Bitmain S19 Pro ASIC Miners in approximately the next 30-60 days, followed by the remaining 500 shortly thereafter.

HIVE Blockchain Technologies Ltd. recently announced that it has ordered 1,090 Bitmain Antminer T17+ SHA 256 mining machines as it continues to scale up next generation mining power at its 30 megawatt capacity, green energy-powered bitcoin mining operation in Quebec acquired in April.

Delivery and installation of the new mining equipment is anticipated to occur later this month.

Combined with the recently installed 750 Bitmain S17+ Antminer machines operational at its Quebec facility, HIVE estimates its aggregate operating hash rate, specifically from next generation mining equipment at its Quebec facility, will be approximately 118 PH/s by the end of June.

This excludes further mining purchases.

The cost for the 1,090 T17+ machines was approximately US$1,000 per unit, or just over US$1 million, financed through the Company’s net cash.

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