Riot Platforms has acquired new mining equipment from MicroBT, making it clear that mining competition is heating up.
Riot Platforms, one of the leading Bitcoin mining companies in the United States, announced recently the Acquisition of more than 60.00 ASCI Bitcoin miners from MicroBT, in order to boost its Bitcoin mining power by up to 18 EH/sThis acquisition, worth a total of $290,5 million, represents a significant step forward for Riot in its goal of becoming one of the largest mining companies in the sector.
The miners purchased by Riot are from the latest generation of MicroBT, more specifically we are talking about the M56S++, M66 and M66S models, all immersion miners (they are cooled in pools filled with water or coolant). These miners have a hash power of 280 TH/s, which represents a 50% increase over the previous generation miners. Delivery of the miners will begin in the first quarter of 2024 and will be completed in the second half of that same year.
With this acquisition, Riot will increase its hash capacity from the current 8,1 EH/s to 26,1 EH/s. This will make them the sixth largest Bitcoin mining company in the world. However, the MicroBT deal also leaves the door open for Riot to acquire up to an additional 75 EH/s in the future. If this additional purchase goes through, Riot would become the third largest Bitcoin mining pool, displacing F2Pool and joining AntPool and Foundry.
Riot seeks to strengthen its presence in mining
This acquisition has several important implications for Riot. First, it will allow it to significantly increase its hash capacity, giving it a larger share of the Bitcoin mining market. It will also allow it to reduce its production costs, as M66S miners are more efficient than previous generation miners. And finally, it will allow it to strengthen its relationship with MicroBT, the world's leading Bitcoin miner manufacturer.
The decision makes a lot of sense, when you look closely at the different elements that are approaching the mining sector in the coming months. First, we have the price recovery of Bitcoin, which is currently at around €38.500 (about $41.000 USSD) and with good prospects to continue increasing until the arrival of the halving in April 2024.
And secondly, we have the arrival of the halving and the impact that this will have on Bitcoin rewards, its scarcity and its price. In this sense, there are quite a few specialists and historical experience that make very clear the upward trend of Bitcoin after the halving. A situation that the community does not doubt will happen again and, in that case, the mining pools with the greatest mining power are the ones that are in the best advantage to take advantage of the bullish cycle that may begin.
Bitcoin Mining in 2023: A Complete Reconfiguration
Moves like Riot's highlight how Bitcoin mining has been reconfigured in 2023. First, the industry has begun to concentrate even more in the hands of a small number of large mining companies. Mainly Foundry, AntPool and F2Pool.
Of these, Foundry and AntPool have KYC/AML processes in place for miners to participate in their pools, and Foundry, for example, adds OFAC filters to its operations. Recently, it was also learned that F2Pool was also applying an OFAC transaction filter, but after a harsh response from the community, they were forced to remove it for the time being. In any case, a sector like mining that has always been open has also begun to regulate itself, and it is likely that this trend will continue in the future.
Another important point in this reconfiguration of Bitcoin mining has been the focus on efficiency. The use of new, less energy-intensive miners has been vital, not only so that mining pools could make a profit in the face of the prolonged bear market, but also to reduce their operating costs, especially those of electricity and air conditioning. Going for the most efficient miners guarantees that your rewards will be higher, your expenses will be reduced, and your final profits will increase.
And finally, mining has become more globally distributed. In 2019, before the pandemic, most Bitcoin mining was concentrated in China, driven by cheap energy there. Following the ban on mining in China, and the enmity towards mining from Russia and countries around it, many miners had to disperse around the world to maintain their operations. Interestingly, despite the fact that many miners are now regulated, Bitcoin mining is now more resilient in terms of infrastructure.
In any case, the implications of these reconfigurations are significant. Industry concentration makes it harder for individual miners to compete. Energy efficiency reduces production costs, but can also lead to pollution. Meanwhile, the globalization of mining makes it harder for governments to control the industry.
These trends are likely to continue in 2024 and beyond, especially as Bitcoin mining becomes increasingly competitive and globalized. And Riot and its latest announcement provide a clear indication of this.
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