Riot Blockchain Spent Over $600 Million on New Mining Facility
Riot Blockchain recently announced that it had bought a Bitcoin mining facility. The Whinstone US Inc. facility is the largest BTC mining facility in the US. Riot Blockchain bought the facility from Northern Data AG, a rival in the BTC mining world.
Details of the Purchase
As part of the purchase, Riot Blockchain will pay $80 million in cash. It will also pay another $571 million in common stock. In total, the company will pay $651 million for the mining facility. With the purchase, Riot Blockchain will become the largest publicly-listed blockchain mining farm in the world.
What the Leadership Team Had to Say
According to Jason Les, the Riot CEO, the purchase of the facility was their most significant achievement to date. He added that the purchase would position Riot as a leader in the BTC mining sector. The CEO said that the Whinstone facility would be the foundation of the company’s mining operations. According to Les, the mining facility would be used to “drive our goal of increasing the American footprint in the global [BTC] mining landscape.”
According to the CEO of Northern Data, Aroosh Thillainathan, be becoming a minority shareholder in Riot, the company will benefit from synergies generated by the purchase agreement. He noted that it would help to boost the value potential of Bitcoin globally.
Why the Purchase is Significant
The Whinstone facility is the biggest in the US. It is located on 100 acres in Rockdale, Texas. It has a total power capacity of 750 MW. According to the announcement, Riot plans to expand the mining farm’s capacity by 300 MW. Riot states that it has already signed a long-term power supply contract with local power producers in the state of Texas. The purchase will give Northern Data AG a 12% stake in Riot’s common stock. According to the announcement, Northern Data AG plans to spend $80 million in cash to expand its existing operations.
A Short of the Participating Firms
Whinstone and Northern Bitcoin AG merged in 2019 to create Northern Data AG. Aroosh was subsequently chosen as the CEO of the joint company. Since the merger, the firm has sought to diversify its operations from BTC mining to AI, IoT, and various other emerging technologies.
While Riot has made significant strides in the BTC mining world, it has not faced some problems in the past. For instance, the company has had to deal with legal issues when it decided to rebrand into a blockchain-focused firm. A while back, investors in the firms sued Riot for its decision to invest in digital currencies. The investors claimed that the move was done to manipulate shares. Initially, Riot went by the name Bioptix and its primary focus at the time was on biotechnology.
