Availability and affordability of effective Bitcoin mining equipment is one the major factors that influence the progress of the bitcoin mining industry. Many Bitcoin miners have gone out of business due to this factor. Bitcoin mining company Core Scientific is the latest entity to declare bankruptcy in this respect.
US Bitcoin Miner Goes Bankrupt
The US-based company filed for bankruptcy back in December 2022. While Core Scientific was making some profits back then, the reasoning was that the cash flow wasn’t enough to off-set its debts. So a decision was made to go out of business.
Other funding avenues were to be explored as well. In March 2023, the court approved an application by the company to borrow cash amounting to $70 million.
Luckily, there seems to have emerged a new savior wiling to carry the cross for the troubled. That’s how Bitmain got involved. Bitmain is one of the largest and most popular manufacturers of crypto and Bitcoin mining equipment.
The “Core” Investment In Bitcoin Mining Equipment
Core Scientific and Bitmain have now inked a deal in which Bitmain will provide $77 million worth of crypto and Bitcoin mining equipment to Core Scientific. This will be compensated in part ($23.1 million) in cash and the rest ($53.9 million) in form of stock equity.
This way, Core Scientific gets to stay in business and Bitmain gets to earn revenue from profits gained from subsequent Bitcoin mining. Bitmain CEO Max Hua said that the deal will enhance the relationship between the two companies and support the growth of the Bitcoin network.
Improve Efficiency And Preparedness Ahead of Bitcoin Halving
The deal will see Bitmain deliver 127,000 pieces of Bitcoin mining equipment in form of Bitcoin mining servers of type S19J XP with around 151 TH (Tetra-hash) of mining power. As expected, Core Scientific CEO Adam Sullivan was happy about this development.
He said,
We are honored to expand our significant relationships with Bitmain. Together, we have worked tirelessly to professionalize our industry, charting a path for the long-term growth of the Bitcoin network as Bitcoin adoption increases around the world.
According to Adam, the boosted mining power will increase the company’s mining efficiency and also help in preparation for the next round of Bitcoin halving expected sometime in early 2024.
The company’s stock has already rallied 7% since the courts gave a nod for the funding borrow that paved the way for the deal with Bitmain. Bitmain’s move to involve in the Bitcoin industry is in tandem with recent wave of various entities pouring money into Bitcoin.
