A Strengthened Alliance
Core Scientific, Inc., a key figure in high-performance blockchain computing data centers and software, has announced a substantial investment from Bitmain, a leading global producer of digital currency mining servers. This investment, totaling $53.9 million, not only solidifies the bond between the two entities but also emphasizes Bitmain’s unwavering commitment to the North American digital asset mining industry. The two firms have decided to acquire new Bitcoin mining equipment and have also established a fresh hosting agreement.
The Terms and Implications
The terms of the purchase agreement dictate that Bitmain will supply Core Scientific with a whopping 27,000 Bitmain S19J XP 151 TH bitcoin mining servers. In exchange, Bitmain is set to receive $23.1 million in cash and stocks worth $53.9 million from Core Scientific. The stock’s per-share value will be determined according to a Chapter 11 reorganization plan approved by a bankruptcy court, with approval expected in the upcoming fourth quarter. The S19J XP boasts an impressive efficiency, operating at 21.7 Joules per TH/s.
From my point of view, this strategic partnership and the terms of the agreement signify a mutual trust and a shared vision for the future of Bitcoin mining. The collaboration also showcases the companies’ dedication to enhancing the Bitcoin Network, especially considering the global surge in Bitcoin adoption.
A Glimpse into the Future
Core Scientific’s success story is intertwined with Bitmain’s contributions. Over its operational span, Core Scientific has overseen more than 600,000 Bitmain miners across its data centers. Remarkably, 99% of the over 200,000 miners currently in operation, whether owned by Core Scientific or hosted for clients, are Bitmain S19 models.
The 27,000 units from the recent agreement are projected to be up and running by the fourth quarter of 2023, potentially adding a significant 4.1 exahashes to Core Scientific’s self-mining hash rate. Additionally, both companies have committed to upgrading Bitmain’s older-generation miners at Core Scientific’s facilities with the newer S19J XP servers, which will further boost the total hash rate.
As I see it, the future looks promising for both Bitmain and Core Scientific. Their combined efforts and shared vision are likely to pave the way for advancements in the Bitcoin mining sector, ensuring its growth and sustainability in the years to come. However, like any investment, there are inherent risks, and only time will tell if this partnership will yield the expected results.
