The race to secure access to energy in Bitcoin mining

[ad_1]

Fr Sonneveld on Unsplash

The popularity of Bitcoin (BTC) and other cryptocurrencies like Ethereum (ETH) and Dogecoin (DOGE) has exploded.

Celebrities like Elon Musk, CEO of Tesla (NASDAQ: TSLA) are constantly tweeting about it. And institutional money has poured in from Greyscale Bitcoin Trust (OTCMKTS: GBTC) and CitiBank (NYSE: C).

This growing popularity has led to adoption and in doing so has created an arms race between large Bitcoin mining companies like Marathon Digital Holdings Inc. (NASDAQ: MARA), Riot Blockchain Inc. (NASDAQ: RIOT) and Mawson. Infrastructure Group Inc. (NASDAQ: MIGI). These companies provide huge amounts of computing power to the Bitcoin network and in doing so help keep it secure. They are essential for the proper functioning of the network.

Power is at the heart of their business. Electric power. Bitcoin mining uses specialized computers called Application Specific Integrated Circuits (ASICs) to process an incredible number of calculations per second. These calculations allow the network to function. And these ASICs are very power hungry.

For context, the Antminer S19, a popular ASIC, uses 3,250 watts of power. The machines operate 24 hours a day, 7 days a week, 365. Thus, 1 ASIC consumes 78 kilowatt-hours (kWh) of energy per day and 28,470 kWh per year. That’s almost as much energy as the average 3 American households use in the same amount of time. And it’s 1 machine. Most of these companies operate tens of thousands of machines at a time.

If one thing is true for these companies, it’s that power is king. Access to abundant and cheap energy is perhaps the most important factor in the ability of Bitcoin’s mining operations to thrive.

These companies know this and compete with each other for the most reliable and cheapest energy they can find. It is not easy. As businesses grow their businesses, access to electricity is often a bottleneck. This is the limiting factor.

Mawson has worked diligently to give himself the opportunity to grow. It builds its own facilities, chooses its sites carefully and secures long-term leases. This means the business is in the driver’s seat and not at the whim of a third-party hosting company.

The story continues

The company currently has 2 facilities in the United States with a combined capacity of 200 megawatts (MW) by the first quarter of 2022, and a significant opportunity to expand the size of these facilities over time. Mawson recently announced a new 100 MW facility in Pennsylvania. It is building these facilities and plans to secure another US site and 2 Australian sites to reach a capacity of 1,000 MW by 2023. This 5-fold increase will allow Mawson to deploy tens of thousands of additional miners and continue to operate. increase this capacity without fear. .

In the race for cheap, reliable (and long-lasting) power, Mawson seems to have a leg up on the competition.

See more Benzinga

2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

[ad_2]