Intensive Due Diligence Conducted on Texas Bitcoin Mining Operations

As the cryptocurrency industry continues to evolve, the importance of due diligence in assessing Bitcoin mining operations becomes paramount. Recently, the CoinShares research team embarked on a trip to Texas to evaluate various Bitcoin mining facilities, including Core Scientific, IREN, Riot Platforms, and Galaxy Digital – all of which have investments or are part of the BLOCK Index and WGMI.

Why Texas is Emerging as a Bitcoin Mining Hub

Known for its traditional focus on agriculture and oil, Texas is quickly establishing itself as a prominent player in the data center industry. The state’s combination of low-cost land, affordable power, and favorable political environment make it an ideal location for Bitcoin mining operations. Each company visited in Texas showcased innovative cooling solutions, crucial for efficient mining operations in the state’s hot climate. While some cooling methods were found to be costly, others proved to be more cost-effective.

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Exploring Innovative Cooling Strategies

One standout was IREN, with its large-scale, low-cost air-cooled solutions that emphasize advanced filtration and ventilation systems. At their Childress site, the CoinShares team witnessed the adaptability of IREN’s machines to align with grid requirements and power pricing rapidly.

Galaxy Digital, which acquired the Helios site, opted for evaporative air cooling over immersion cooling, enabling potential scaling from 200MW to over 800MW. Additionally, they practice curtailing mining during periods of high power prices and selling unused power back to the grid, contributing to grid load balancing.

Overcoming Challenges and Embracing Expansion

Despite financial challenges, Core Scientific boasts proven air-cooled technology and is exploring expansion into AI, with significant hosting contracts secured with Coreweave.

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Riot Platforms, known for its technical advancements, is focusing on capital-intensive operations at its Corsicana site with plans to scale to 1GW. Their Rockdale site features mining hardware cooled in dielectric fluid baths, allowing for overclocking to increase income during price surges.

The Future of Bitcoin Mining

Following the recent halving event, a 14% drop in hashrate was observed, causing inefficient miners to exit the market. However, CoinShares predicts this drop to be temporary, with miners planning substantial expansions likely to elevate the network hashrate to over 700 exahash by the end of the year. The listed miners aim to increase hashrate from 118 exahash at the end of 2023 to 234 exahash by the end of 2024, signifying a 98% rise.

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The Bitcoin mining industry is rapidly maturing, with a growing emphasis on environmental sustainability. Miners are actively managing power consumption during peak demand, investing in renewable energy sources, and improving grid efficiency. This shift towards environmental consciousness is gaining increased political support for the industry in Texas.

Texas Bitcoin Mining Operations Undergo Intensive Due Diligence

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