Miners are Profiting Without Mining
Companies are becoming flexible in utilizing proprietary hashrate
As public mining companies provide updates for July, it is interesting to see how their ranking in terms of bitcoins produced differs from that in terms of their realized hashrate. Charts below, from TheMinerMag, show both rankings of the top mining companies. (Realized hashrate is an implied hashrate metric based on a company’s bitcoin and bitcoin equivalent production from its proprietary hashrate)
The difference in the two charts is mainly because more companies have executed strategies that allow them to be flexible with how they utilize their proprietary hashrate when needed. They can deploy the entirety for self-mining, curtail some of it for energy sales/credits (e.g. Demand Response programs), or rent them out as cloud mining products.
For instance, Iris Energy (IREN) mined five more bitcoins than Cipher Mining (CIFR) in July, but Cipher raked in much more than Iris in power sales (an equivalent of 22 bitcoins) by curtailing some of the proprietary hashrate.
Riot Platforms (RIOT) mined even less than the two rivals but received $8.4 million in power and demand response credits, equivalent to ~280 bitcoins based on the average BTC prices in July.
In its Q2’22 disclosure, Riot allocated about 40% of similar credits to offset the cost of revenues in its proprietary mining segment. Hence, TheMinerMag’s chart above (and its Data section) includes the equivalent of an additional 112 bitcoins (40% of 280 bitcoins) “mined” in Riot’s realized hashrate.
ICYMI, TheMinerMag’s realized hashrate chart now explains the methodology of the metric. Because it now includes both BTC and BTC equivalent from proprietary hashrate, it provides a view of how mining companies strategize their proprietary hashrate in response to changing conditions such as bitcoin’s hashprice, the energy market, and the weather.
As bitcoin’s halving draws nearer, such distribution of the proprietary hashrate may become even more dynamic.
Regulation News
New York legislators face off over mining moratorium during Coinbase town hall - Blockworks
Hardware and Infrastructure News
Genesis Digital Assets Announces the Opening of Three New Data Centers - Bitcoin Magazine
First new Vogtle nuclear reactor enters operation, making history - The Atlanta Journal-Constitution
Terawulf and Iris Energy reported a surge in electricity cost per BTC mined in July - Link
Largest Crypto Miners Will Benefit Most From Capacity Growth: Bernstein - CoinDesk
Corporate News
Marathon Digital Solidifies Position as World's Largest Publicly Traded Bitcoin Miner - CoinDesk
Core Scientific Promotes Adam Sullivan to Chief Executive - Blockworks
Marathon Increases Authorized Common Stocks from 200M to 500M Shares - Link
Cipher Seeks to Raise up to $250 Million via Stock Offerings - Link
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