Riot Blockchain has announced that it has signed a $17.7 million purchase with China’s Bitmain – the largest and most dominant crypto mining firm in the world – and that it will buy more than 8,000 next generation Antminer machines to extract new coins.
Riot Blockchain Is Expanding Its Horizons
According to the terms of the purchase, Bitmain will deliver approximately 2,000 machines per month to Riot Blockchain beginning in January of next year and ending four months later in April. Riot is a publicly traded company that has recently had to put some of its plans on hold thanks to the growing coronavirus pandemic. Originally, Riot had announced that it would receive a special batch of miners beginning this November, though now it looks like those plans have been delayed by a few months.
In a statement, Riot Blockchain explained:
The newly announced order of 8,000 S19 Pro (TH/s) miners are expected to be received and deployed during the first four months of 2021 and are expected to raise Riot’s total operations hash rate capacity to 1.45 EH/s (1,446 PH/s). Riot expects to then have a fully deployed fleet totaling approximately 15,040 miners.
This would all be fine and dandy except for one little issue: just a few months ago, Riot was allegedly suffering due to the growing pandemic to the point that a report was issued suggesting its operations had fallen into the doldrums. The company was potentially facing an imminent shutdown in that part of the way it garners its funds is by reselling or redistributing the equipment of other companies (in this case, the Antminers from Bitmain).
However, if nobody is buying, then Riot isn’t going to increase its revenue, and as of late, the bitcoin mining space has been facing several unprecedented hardships. For one thing, bitcoin and crypto mining is not considered an essential business, which means that many people have been forced to shut down their operations with everything that is going on.
With so many furloughed workers and mining companies temporarily – or permanently – shutting their doors, mining equipment is either not being sold at all or only in small amounts.
At the time, Riot issued the following statement:
If we are unable to effectively service our miners, our ability to mine bitcoin will be adversely affected as miners go offline.
Where Is This Money Coming From?
Considering Riot Blockchain was one of these ill-fated companies for a while, where is it getting the money it needs to purchase all these miners? Not long after announcing its pain and trouble, the company managed to purchase roughly 1,000 separate Antminer machines from Bitmain, bringing its total mining “army” to a whopping 2,000 machines.
This doesn’t sound like a company that’s suffering financially, especially considering it now has the means to enact a purchase exceeding $17 million.