Bitcoin miner, Marathon Patent Group (MARA.Q) moved their recently purchased S9 Bitmain Antminers to Computer North’s new 100MW Nebraska facility today.
Marathon’s decision includes reloading their existing miners from their present location in Granby, Quebec, which will reduce operating costs by $60,000 for the miners presently in operation.
“This deployment of our recently acquired Miners and redeployment of our existing Miners will establish a very low-cost operation while substantially increasing the company’s cash flow,” said Merrick Okamoto, Marathon chairman and CEO.
Mining costs money, and it’s more than in the amount of electricity expended each month to keep the lights on and the fans going while your ASIC rigs do their homework. Let’s consider that in 2017 Hydro Quebec launched an attractive program to attract data centres to the province, accompanied with an order from the government to allocate an additional 300 megawatts (MW) to the industry.
There were strings attached: the companies had to create a minimum number of jobs, invest in the local area, and find a use for the heat generated from the hardware. Not much and not unreasonable for what’s being offered.
Their August 28, 2019, press release states:
The Miners will be placed into service in a Co-Location hosting facility with electricity costs of $0.035 per KwH and $0.02 per KwH for the all-in hosting management. The combined cost of $0.055 per KwH equates to a breakeven of approximately $5,050 per Bitcoin resulting in Gross Profit Margins above 100% for each Bitcoin earned from mining at a price of $10,000/BTC.
Bitcoin’s market rejuvenation spells potential difficulty for bitcoin miners, because as the number of miners entering the network increases so does the overall HashRate and difficulty in mining the currency. This increase can reduce the amount of Bitcoins rewarded to miners, which will have a negative effect on any given company’s revenue. But as the difficulty rises and unprofitable companies drop out, then the difficulty rate will drop as well.
Comparatively, the new site in Nebraska offers co-location pricing beginning at $0.10 per KwH for base-rate mining, which is considerably less than what was offered in Quebec. But Computer North absorbs plenty of other costs that Marathon would have otherwise had to eat every month on a tiered system. On its lowest tier, which is a BYO-machine operation, a company pays rent and KwH’s, while on the largest tier, which equipment rentals and serving, including full network support for an extra $15 a month per piece of equipment rented.
Because Marathon is bringing all of their own equipment to Nebraska, they needn’t pay as much to take advantage of the space, and cut costs through their base space rental.
The company anticipates having 3,500 miners installed over the next two weeks and the remaining 3,700 miners installed by December 15, 2019. Once they’re finished the deployment, Marathon will have 7,200 miners at work pulling in revenue, which will increase the current HashRate production level from 14 petahashes per second to approximately 100 petahashes.
Hash rate is a unit of measuring in hashes per second. In simplest terms a hash is part of a calculation that is needed to verify a bitcoin transaction. 1 Petahash, also written 1 PH/s, is one quadrillion hashes per second.
Mara’s chart shows a steady decline over the past quarter, moving from a high of $3 to it’s present state at $1.45. The trajectory shouldn’t come as a surprise to anyone who’s been following Bitcoin since it started its bull run in the summer. Bitcoin itself is up today to CAD$11,115.11 (at the time of writing) but down since its high of $16.5K during in July.
—Joseph Morton
