Atlanta's Bitmine Immersion Technologies plans to establish new cryptocurrency mining facilities after a $1.1 million investment.
The 1-year-old company is prioritizing Georgia or Texas and hopes to secure up to $10 million from investors for the expansion, said Erik Nelson, interim chief executive officer at BIT.
BIT buys shipping containers and converts them into bitcoin mining centers, which are similar to data centers. The containers hold servers that complete the algorithm needed to produce "virgin" bitcoin and also include cooling tanks so the servers don't overheat.
“Clients in the mining business are telling us that hosting space is tight,” Nelson said. “We’ve talked to people that have over 10,000 mining computers in a warehouse looking for a place to put them.”
For now, Georgia is favored for the expansion since the company is already headquartered in the state, Nelson said. BIT plans to add 10 to 20 employees by the end of the year for the new facilities.
But Texas is highly competitive option. Both have business-friendly environments and house facilities owned by competitors and clients of BIT, Nelson said.
Crypto mining companies prefer areas with low energy costs and carbon-free energy options. Profitability for crypto mining is essentially the value of bitcoin against the cost of electricity, and the server farms run huge energy bills.
Atlanta and Dallas have the lowest power rates out of the primary markets for data centers, according to CBRE’s Digital Infrastructure in 2021 report.
Both states have similar carbon-free energy sources as well. Around 26% of Georgia’s electricity comes from nuclear sources while 8% comes from renewable ones, according to the CBRE report. In Dallas and Houston, 23% of their electricity comes from renewables while 8% come from nuclear.
BIT is also considering incentives from utility companies, interested local investment groups and the technology talent pool for its new facilities, Nelson said.
Georgia has a growing number of cryptocurrency mining facilities. Australian-based Mawson Infrastructure Group (Nasdaq: MIGI) is expanding its facility by 150 megawatts in Central Georgia. Utah-based CleanSpark Inc. (Nasdaq: CLSK) is investing $145 million into a mining facility in Norcross, and ISW Holdings Inc. and Bitman Technologies are adding 56,000 mining servers across the state.
“The market for hosting is going to grow as long as bitcoin is around and is profitable to mine,” said Nelson. “You can expect large mining companies to be mining Bitcoin 10-20 years from now.”
BIT chose Trinidad for its first facility due to access to cheap power. But its clients prefer their equipment to be based in the U.S., Nelson said, which led to this expansion.
The company launched in July of last year. It currently has five remote employees in the U.S. and two in Trinidad. Its valuation is approximately $120 million, Nelson said.
