Bitfarms Partners with Stronghold for Miner Hosting Expansion

Author: Logan Wright Updated: 09-13-2024 10:30 AM

Bitfarms and Stronghold Join Forces for Hosting Agreement

Bitfarms Ltd. (NASDAQ: BITF), a prominent player in the bitcoin mining industry, has recently established a miner hosting agreement with Stronghold Digital Mining Hosting, LLC. This strategic partnership represents a crucial development in Bitfarms’ ongoing efforts to optimize operations and enhance control over power costs, a significant expense for the company.

Accelerating Deployment of Mining Equipment

Under this new Hosting Agreement, Bitfarms is set to accelerate the deployment of 10,000 Bitmain T21 miners initially scheduled for activation at its site in Yguazu, Paraguay, slated for December 2024. Instead, these miners will be energized at Stronghold’s Panther Creek site, with operations anticipated to begin as early as October, significantly ahead of the original timeline.

Expected Performance and Benefits

Once energized, these miners are projected to deliver up to 2.2 exahash per second (EH/s) of computing power. Ben Gagnon, the CEO of Bitfarms, emphasized the significance of the partnership, noting that the collaboration with Stronghold's existing power generation capabilities offers a robust pathway to sustained and profitable growth.

Financial Implications of the Agreement

The Hosting Agreement will commence on October 1, 2024, with an initial term that will extend through December 31, 2025. After this period, the agreement will automatically renew for additional one-year terms unless a party provides written notice to terminate. Bitfarms will pay Stronghold a monthly fee, which will be calculated as fifty percent of the profits generated by the miners, adjusted for initial upfront payments and power costs.

Financial Security with Upfront Deposits

In conjunction with the Hosting Agreement, Bitfarms has minimally deposited $7.8 million with Stronghold, a safeguard that mirrors the estimated power costs for the first three months of operations. This deposit will be fully refundable one business day after the agreement's initial term concludes.

About Bitfarms: A Leader in Sustainable Mining

Founded in 2017, Bitfarms has established itself as a global leader in vertically integrated bitcoin data center operations. The company is committed to sustainable mining practices, leveraging predominantly hydroelectric power along with long-term energy contracts to minimize environmental impact. With a total of 12 fully operational data centers and two more under development situated in four key regions, Bitfarms demonstrates its commitment to efficient and responsible mining.

Expanding Horizons and Future Planning

Bitfarms is not just focused on bitcoin; it is actively seeking to diversify its offerings and maximize shareholder value by exploring opportunities in high-performance computing and artificial intelligence alongside its bitcoin mining operations. This multi-pronged approach illustrates the company's vision for sustainable growth in an evolving market landscape.

Frequently Asked Questions

What is the purpose of the Hosting Agreement with Stronghold?

The Hosting Agreement is designed to allow Bitfarms to deploy its miners at Stronghold’s facility, optimizing power costs and accelerating the use of its mining equipment.

When is Bitfarms expected to energize the new miners?

The new miners are anticipated to be energized in October 2024, two months earlier than initially planned.

How does Bitfarms plan to achieve sustainable operations?

Bitfarms is focused on using environmentally friendly hydroelectric power and developing long-term power contracts to ensure sustainability in its mining practices.

What financial commitments did Bitfarms make under the Hosting Agreement?

Bitfarms has committed to sharing profits generated by the miners with Stronghold while depositing $7.8 million as a safeguard for initial operational costs.

What is the long-term strategy of Bitfarms in the digital currency market?

Bitfarms aims to merge its bitcoin mining operations with opportunities in high-performance computing and AI, positioning itself for growth beyond conventional mining activities.

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