Bitcoin mining company Blockware Mining has raised $25 million to grow its U.S. operations in a second funding round. The firm has now raised $32 million in total.
Launched in 2019, Blockware Mining set up its main base of operations in Paducah, Kentucky. The company is building a 30-megawatt facility in the area, which it hopes will expand to 100 megawatts in the future.
The company currently possesses 300 PH/s of mining power but expects to use the new funding to acquire more hardware and reach 1 EH/s by mid-2022. To put this in perspective, that would equate to about 1% of bitcoin’s current global hash rate.
“The scarcity of rigs creates a significant barrier to entry for companies looking to enter this business and we have allocated significant resources to making more deals and funding our rapid growth,” Blockware Mining CEO Michael Stoltzner said in a press statement.
The great hash rate migration
The firm appears to be taking full advantage of the current global bitcoin mining situation.
China’s crackdown on bitcoin mining — which has caused many miners to shut down or start moving out of the country — has significantly reduced its contribution to bitcoin’s hash rate. Because China was so dominant in this area, this has led to a 50% drop in bitcoin’s hash rate.
While bitcoin’s price drop over the last month or so has made bitcoin mining less profitable, the drop in hash rate has countered that by making it significantly easier to mine. This means there is room on the table for existing miners to expand their businesses.
This presents opportunities for countries around the world.
The U.S., which already has a strong bitcoin mining scene, appears to be taking full advantage, with many mining firms growing their operations. It may also stand to benefit El Salvador, which is planning on using geothermal energy generated from a volcano to mine bitcoin.
“Currently, only an estimated 10% of the hash rate worldwide is generated in the U.S.,” said Stoltzner. “By providing low hosting rates, Blockware Mining will create better worldwide distribution of the Bitcoin network while making the hash rate in the U.S. more globally competitive.”
But the opportunity may not last for so long. Rather than simply shut down, miners in China are moving out of the country to other low-cost jurisdictions. Chief among them is Kazakhstan — the fourth largest bitcoin mining country in the world — which offers cheap electricity and is located not far from China.