Bitcoin mining hosting firm BitRiver issues energy-backed tokens to raise $35 million

Russia-based BitRiver has rolled out an ERC-20 token to pre-sell the energy capacity of its bitcoin mining colocation facilities.

The bitcoin mining farm operator said in an announcement on Monday that it's raising $35 million through the pre-sale of 100 million BitRiver Tokens (BTR) with each representing one watt-hour of the low-carbon energy at its colocation data centers. The token is scheduled to list on Bithumb Global in the following week.

BitRiver said that mining investors who hold the BTR tokens have the right to secure an equivalent amount of energy capacity at BitRiver and up to 10% of the BTR can be used to pay for their monthly bills at the farm.

The token issuance is part of BitRiver's efforts to secure mining customers for its two operational data centers with 110 megawatt of capacity as well as to fuel the development of its third site that's under construction and expected to become operational in September also with a 100 megawatt capacity, according to the white paper. 

“By launching the BTR token, we seek to accelerate our efforts to make cryptocurrency mining greener while offering investors around the world an easier-than-ever way to become part of environment-friendly cryptocurrency mining today," BitRiver founder and CEO Igor Runets said.

For instance, if buyers purchase 100,000 BTR at a cost of $35,000, they are entitled to host bitcoin mining machines at BitRiver's facilities that consume 100 kilowatt-hour (kWh) of energy, provided that they have notified BitRiver 90 days ahead and staking the tokens for three consecutive months.

That amount of capacity can power about 30 units of Bitmain's AntMiner S19 Pro, which computes at 110 TH/s and is the most efficient mining equipment on the market.

BitRiver said it prices each BTR at $0.35 as it factors in a yearly cost of utility at its data centers.

In the same instance of 100,000 BTR that equals to 100 kWh, BitRiver assumes the annual cost of using that amount of electricity is $35,000. That means the monthly cost is around $2,916 and the hourly cost is $4 – hence the price of each kWh is at $0.04.

Up to 10% of the 100,000 BTR can be used to pay for a monthly bill, based on its market prices and BitRiver said it will buy back all the tokens after five years.

The move comes at a time of surging demand for bitcoin mining machines while the world is experiencing a global chip shortage. Since BitRiver is essentially collecting utility fees upfront, it said it also holds a reserve of additional 65 million BTR for paying a 10% annualized interest to BTR holders for five years.