The world of bitcoin mining has taken some serious blows, and it doesn’t look like the space is going to be recovering anytime soon. With prices falling to such drastic lows, it appears that many miners are either having to leave the space altogether or take drastic measures to ensure their money stays in place, as is the situation with firms like Stronghold Digital Mining.
Stronghold Digital Had Too Much Debt
As one of the biggest and most stable digital currency mining firms in existence, Stronghold Digital recently had to sell a whopping 26,000 mining rigs so it could pay off debt worth more than $65 million at the time of writing. The company issued a report explaining the following:
On August 16, 2022, Stronghold entered into an agreement with NYDIG ABL LLC (NYDIG) and another participating lender to eliminate all $67.4 million outstanding under the equipment financing agreements with these lenders and consensually return approximately 26,200 bitcoin miners (approximately 18,700 of which are currently operating) with hash rate capacity of approximately 2.5 exahash per second (EH/s), freeing up the related fully developed data center slots.
Crypto mining is becoming expensive because crypto prices are down for the count. Experiencing one of its most bearish markets ever, bitcoin – which was trading for a new all-time high of approximately $68,000 per unit just ten months ago – is now struggling to maintain a position in the low $20K region. It’s a sad and ugly sight to see, and this has caused many miners to have to either leave the space or rearrange things to an incredible extent just so they can break even.
It seems that no matter how big your company may be, there is always a chance you’re going to feel the heat somewhat, and Stronghold Digital, despite its size, is still susceptible to all the crazy things that are currently happening in the bitcoin space.
Too Many Problems with Crypto?
In addition, many players in the crypto market are also becoming worried about ongoing fraud attempts, with companies like Steam saying they will never permit the use of crypto for this reason. In a statement, the firm’s Gabe Newell stated:
The problem is that a lot of the actors who are in that space are not people you want interacting with your customers. We had problems when we started accepting cryptocurrencies as a payment option. 50 percent of those transactions were fraudulent, which is a mind-boggling number. These were customers we didn’t want to have.
Putting all this aside, there are constant arguments that the mining arena is prone to using excessive energy, which could put our planet in danger in the coming future. There have been several reports published in recent years stating that bitcoin mining uses more electricity than most developing nations.