Iris Energy to Expand Operations to 4.3 EH/S by Q4 2022
The Sydney-based Bitcoin miner Iris Energy, with sites in British Columbia, Canada, is deploying additional capital to improve its contribution to the global bitcoin hash rate.
The mining company is investing in new equipment to take its hash rate (a measure of mining power, higher means more powerful) from 3.7 EH/s by the end of Q3 2022 to 4.3 EH/s by the end of Q4, 2022. The company is expanding the capability of its Mackenzie, British Columbia plant from 50 MW to 80MW to ensure that it hits its target of 4.3 EH/s by the end of this year.
Beyond this target, the company will delay expanding further, given the current market conditions.
Since the company started mining bitcoin in 2019, it filed for an Initial Public Offering in October last year. Mining is the process of validating transaction blocks on a blockchain by solving complex mathematical puzzles using specially designed computers called ASICs. Most large miners today run server farms with sophisticated cooling systems filled to the brim with ASICs.
Liquidation of BTC becoming a hallmark of bear market
Iris Energy has generally liquidated newly mined bitcoins, unlike American competitors Riot Blockchain and Marathon Digital Holdings, which traditionally hold coins. But current market conditions have made even giants like Riot and Texas-based Core Scientific rethink their hodling strategy. According to Bloomberg, Core Scientific recently offloaded 2598 coins, while Riot sold 250. Iris Energy’s Canadian neighbor Bitfarms also recently announced a departure from its hodling strategy, choosing instead to sell 3000 bitcoins for approximately $62 million to inject liquidity into the company and pay off debt.
Smaller miners could be bought off
As big miners bring more computing power online, the bitcoin algorithm increases the difficulty of mining new bitcoins to prevent the concentration of mining power in the hands of a few. Mining revenue from newly minted coins and transaction fees recorded a yearly low on June 16 of $14.4 million, according to Blockchain.com.
These factors, coupled with fluctuating energy costs, can spell doom for mining companies like Xive, which chose to shut down some operations as bitcoin dipped below $25,000. The total hashing power started dropping on June 12. As bitcoin began a six-day slide , smaller mining outfits capitulated and went offline.
It’s a challenging time to be in the mining business, says Alexander Nuemueller of the Cambridge Center for Alternative Finance.
But companies like Iris Energy and Marathon, the latter of which invested $200 million in expanding its operations in the first quarter of 2022, have fixed energy costs and greater tolerance for demanding markets.
There is also a degree of foresight and planning that helps more prominent companies weather the current storm, said Jaime Leverton, the CEO of Hut8, another Canadian outfit. Hut8 has amassed a war chest of 7,078 bitcoin it could use for acquisitions, which the CEO of Argo Blockchain believes could take place within one year.
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