Riot Platforms’ recent acquisition of Bitcoin miners from MicroBT holds significant importance in the context of the upcoming halving event in 2024.
Riot Platforms Inc (NASDAQ: RIOT), a leading player in the Bitcoin (BTC) mining industry has announced a significant development in its quest to expand its mining capabilities.
The company stated in a press release that it has entered into a long-term purchase agreement with MicroBT Electronics Technology Co., LTD, a well-known manufacturer of Bitcoin miners. This strategic partnership aims to enhance Riot’s mining capacity by securing an initial order of 33,280 next-generation Bitcoin miners from MicroBT.
The total consideration for the initial order amounts to $162.9 million, excluding taxes, fees, and adjustments. This equates to an approximate cost of $21.50 per terahash (TH), a competitive price for the mining equipment.
This strategic move comes in anticipation of the 2024 halving event, which is expected to bring significant changes to the Bitcoin mining landscape. With this expansion, Riot Platforms aims to solidify its position as a major player in the crypto mining industry and maximize its mining capabilities for the future.
Riot stated that the miners ordered from MicroBT will be produced in the United States specifically for Riot’s Corsicana Facility. This move aligns with Riot’s strategy of expanding its mining operations within the country. With MicroBT manufacturing the newly acquired miners at a facility in Pittsburgh, PA, this collaboration establishes a robust domestic supply chain for Bitcoin miners, which is a significant milestone for the industry.
Furthermore, Riot noted that the deployment process is expected to take some time due to the significant number of miners involved. According to the agreement, the delivery of the new miners is set to commence in December 2023.
Riot Platforms anticipates completing the full deployment of the 33,280 miners by mid-2024. This time frame allows for careful installation, configuration, and optimization of the mining equipment to ensure optimal performance.
Significance of Riot Platform’s Acquisition for the Halving Event
Riot Platforms’ recent acquisition of Bitcoin miners from MicroBT holds significant importance in the context of the upcoming halving event in 2024. This is because the halving event, which occurs every four years, reduces block rewards for miners, affecting the economics of Bitcoin mining.
However, upon the completion of the deployment, Riot’s self-mining hash rate capacity is projected to increase to 20.1 EH/s (exahashes per second). Increasing the self-mining hash rate capacity is a strategic move by Riot Platforms.
As block rewards decrease, maintaining a competitive hash rate becomes crucial for mining profitability. By expanding its mining fleet and hash rate capacity, Riot Platforms aims to offset the effects of the halving, ensuring continued profitability and operational efficiency.
This significant boost in hash rate capacity positions the company as a major player in the Bitcoin mining industry, solidifying its role in validating transactions and contributing to the overall security and efficiency of the Bitcoin network.