HIVE Digital Technologies has announced the acquisition of Bitfarms’ 200 MW hydro-powered mining site in Yguazú, Paraguay.
Hive Seals Deal With Bitfarms
The multi-phase development plan for the Yguazú site will involve an upfront payment worth $25 million. Once the deal is closed, the remaining $31 million will be paid over the next six months.
HIVE will reimburse Bitfarms $19 million for power deposits made to ANDE, Paraguay’s national electricity administration.
The total purchase is valued at approximately $85 million. It plans to increase HIVE’s global Bitcoin mining hash rate from its current 6 exahash per second (EH/s) to an ambitious target of 25 EH/s by September 2025.
Frank Holmes, Executive Chairman of HIVE, expressed his enthusiasm for the deal. He said, “This transformative acquisition will propel HIVE to over $300 million in annualized revenue and deliver more than $200 million in mining margin, based on current mining economics.“
He continues, “At 2% of the Bitcoin network’s total hash rate, we expect to produce approximately 9 Bitcoin daily at the current difficulty level.“
The site development will progress through two phases:
- Phase 1, already 80% complete, will add approximately 6 EH/s of capacity by April 1, 2025.
- Phase 2 will add a 6.5 EH/s using advanced hydro-cooled ASICs by August 31, 2025.
In addition to the recent HIVE development at the Yguazú site, the company has a separate 100 MW project in Paraguay. When completed by June 2025, the project will provide an additional 6.5 EH/s of hash rate.
Implications for Crypto Mining
The global Bitcoin hash rate has been upward, reaching 300.65 EH/s in February 2023, and expects continued growth. However, concerns about centralization, environmental impact, market competition, and profitability challenges exist.
Since HIVE aims to control 2% of the global Bitcoin network hash rate, this raises concerns about the centralization of mining power. This control could negatively affect Bitcoin’s decentralized nature, which is core to its design and appeal.
The massive scale of operations will significantly increase energy consumption despite using hydroelectric power. This is controversial because the environmental impact of cryptocurrency mining is under intense scrutiny.
HIVE’s aggressive expansion will probably intensify competition among major mining companies, leading to a “hash rate arms race.” This expansion could drive smaller mining companies out of operation and strengthen the industry.
Despite the criticisms, HIVE’s bold move signals that the Bitcoin mining landscape is growing rapidly and sets a precedent for renewable energy sources like hydroelectric power.
Finally, even with increased hash rate and operational capacity, profitability remains a concern because of the industry’s volatile nature.
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