New Bitcoin Mining Machines Hit US As Major Firm Inks Deal With Bitmain

An Antminer ASIC mining machine produced by Bitmain.

© 2018 Bloomberg Finance LP

A principal player in North America’s Bitcoin mining sector just inked a deal for a mammoth import of next generation mining equipment from China, a move in step with other North American mining companies which are scaling operations to compete with their Chinese counterparts.

Core Scientific has purchased some 17,595 Antminer s19s from Chinese ASIC chip manufacturer Bitmain. Some of the new, best-in-class machines have already been installed in Core Scientific’s data centers, while the rest will come online between now and the end of September. According to the mining firm, this represents the largest shipment of Antminer s19s to the United States, as COVID-19 interrupted supply chains for the newly-introduced model in Q1 of 2020.

The deal has been in the works since the beginning of 2020, though Core Scientific would not disclose the final purchasing amount because of the terms of the agreement.

The company operates five mining farms, four of which are split evenly between North Carolina and Georgia and one which resides in Kentucky. Between the five of them, these data centers can juice roughly 381 MW of power to run their machines, and Core Scientific Chief Customer Success Officer Russell Cann said that they have “the infrastructure to quickly expand to 450MW of power at [their] current locations.”

Most of this power comes from coal and natural gas, I was told, and Core Scientific claims to operate “46% carbon free.”

The Great Hashrate Diaspora

Historically, Bitcoin mining has been highly concentrated in China. This is largely a side effect of the infrastructural footprint left by the 22,000 or so dams the Chinese government has built since the 1950s. Seeing as a not insignificant number of these sit idle and most produce an overabundance of electricity, Bitcoin miners have made demand in an otherwise demand-lagging energy market.

These Chinese miners can tap power for kilowatts on the penny. Most of these Chinese hydrodam miners can extract energy for no more than $0.02 per kilowatt-hour (for perspective, the average power cost in the United States is $0.12 kilowatt-hour).

Since Bitcoin takes so much energy to mine, the cheaper the electricity source, the more profitable your operation will be. Since China has so much cheap electricity just waiting to be tapped, it’s become the center of Bitcoin mining.

But it may not be for long. As evidenced by Core Scientific’s purchase, investment is heating up in North American Bitcoin mining operations. 2019 was a seminal year for North America’s Bitcoin mining sector as multiple, high-capacity projects broke ground (like Blockstream’s own mining facilities and Germany-based Northern AG’s expansion to the U.S.).

As new generation mining hardware from China reaches North American miners and investment capital continues to trickle into the mining sector, industry professionals expect North America to continue to eat into China’s global hashrate share.

Core Scientific see this trend taking shape, too, as the company is noticing not only an increase in hashrate in North America, but an increase in capital investment in the mining sector, as well.

“As part of our market monitoring efforts, we’re actively tracking this increased interest in growing hashrate via North American mining operations; in fact, our team’s growth is based on this,” Cann said.

“Our view is that this rise in interest and increase in capital allocation and investment can be attributed to the growing acceptance of crypto and/or digital assets as an investment asset class as well as the favorable investing characteristics of North America; specifically, the stable geopolitical and regulatory environment, suitable climatic conditions and multiple energy sources present,” he concluded.

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