Riot Platforms announced on Tuesday that it has acquired Kentucky-based Block Mining Corp. for $92.5 million as headwinds faced by small-scale bitcoin miners continue to pose challenges for the industry.
Terms of the agreement include $18.5 million in cash and $74 million in Riot common stock, with the possibility of additional payments based on performance milestones, the company said in a statement. statement.
The acquisition of the Colorado-based bitcoin miner will increase the company’s operational capacity by 60 megawatts (MW), with plans to reach 110 MW by the end of the year and more than 300 MW in the future.
Riot’s additional capacity will help bolster its total hash rate, a measure of the computing power dedicated to mining Bitcoin. Higher hash rate improves Riot’s ability to solve complex mathematical problems faster, securing more Bitcoin rewards.
This follows Bitcoin’s halving in April, which reduced the block reward from 6.25 BTC to 3.125 BTC, effectively Mining Cost One coin.
Rising costs, weighed down by higher energy costs and lower profit margins, have forced less efficient miners to incur operating losses this year.
Small mining companies with high operating costs Particularly vulnerableMeanwhile, larger companies with access to cheaper electricity and more efficient equipment have been able to weather the uncertainty.
Riot said that despite recent headwinds, the acquisition is intended to leverage BlockMining’s existing infrastructure and management team to expand the business and improve efficiencies.
The company claims that the acquisition will immediately increase Riot’s hashrate by 1 exahash per second (EH/s), potentially growing to 16 EH/s by the end of 2025.
Riot said the acquisition expands its capacity and diversifies its geographic reach, freeing it from the volatility of energy costs that are tied to specific regions.
Riot operates bitcoin mining operations in Central Texas and Kentucky.
