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Tuesday, Nov 5, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Bitcoin

Bitmain sells 27,000 new bitcoin mining rigs to Core Scientific for $77M

This hardware addition could potentially boost Core Scientific’s hash rate by 4.1 exahash

Bitmain sells 27,000 new bitcoin mining rigs to Core Scientific
Photo by Thought Catalog via Unsplash

Bitmain and Core Scientific, Inc. (OTC: CORZQ) agreed on an exchange of cash and shares totalling $23 million in cash and $53.9 million of Core’s bankrupt stock to finance the purchase of new Bitcoin mining equipment.

The companies said on Thursday that the agreement will result in Core Scientific adding 27,000 bitcoin mining servers to its existing fleet.

Bitmain’s expansion and investment strategy is slated to take effect in the fourth quarter of 2023, subject to approval from a judge. Upon receiving the green light, this hardware addition could potentially boost Core Scientific’s hash rate by 4.1 exahash.

Additionally, the two cryptocurrency mining enterprises have reached an agreement to collaborate on enhancing the performance of Bitmain’s older generation miners currently housed at Core Scientific’s data centers, further enhancing the company’s operational efficiency.

The agreement was concluded in August, and it became official when a court filing outlined Bitmain’s intention to trade mining hardware for both cash and equity as a component of Core Scientific’s restructuring strategy.

Besides Bitmain, the restructuring plan also involved infrastructure provider Anchorage, digital asset lender BlockFi and Mass Mutual Asset Finance. With the exception of Anchorage, all three of these companies opted for a combination of cash and equity to resolve their claims.

Read more: Chilean police confiscate Bitcoin mining rigs in drug bust

Read more: British Columbia’s top court gives the nod to Hut 8 and US Bitcoin merger

99% of Core Scientific’s miners are Bitmain S19 models

Presently, 99 per cent of the more than 200,000 miners the company currently operates for itself and its hosting customers are Bitmain S19 models, including those owned by Core Scientific and those hosted for customers.

In addition to supplying miners to Core Scientific, Bitmain has been a hosting customer for nearly five years, entrusting the company to operate and maintain a large number of its own miners.

As of August 31, 2023, Core Scientific was operating approximately 206,000 bitcoin miners, serving both colocation and self-mining purposes. This amounted to a total energized hash rate of 22.0 exahashes per second, spread across its data center facilities in five United States states.

Core Scientific’s self-mining operations generated 965 bitcoin in August and a cumulative total of 9,755 bitcoin year-to-date through August 31. This output exceeded that of any other publicly listed bitcoin miner in North America.

“We look forward to deepening our strategic relationship with Core Scientific, our long-standing U.S.-based partner,” said Max Hua, Bitmain CEO.

“Their professionalism, integrity and commitment to the success of their hosting customers and to the growth of the Bitcoin Network is unsurpassed in the industry.”

In December 2022, Core Scientific initiated chapter 11 bankruptcy proceedings, citing its decision as a response to the financial crisis and the decreasing value of Bitcoin. The company had been experiencing difficulties in the period leading up to its eventual insolvency due to the tumultuous state of the market.

Core Scientific shares are down 1.1 per cent to $0.69 on the Friday on the OTC markets.

 

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