The world’s largest Bitcoin mining facilities operate at an industrial scale. In the U.S., Riot Platform’s Rockdale mine is believed to be the largest single facility. Spanning 7 buildings, the Rockdale mine has a total power capacity of 700 MW and may reach a hash rate of 20.1 EH/s by mid-2024.
Thanks to companies like Riot, and the world’s largest single miner, Marathon Digital, since 2020, the American Bitcoin mining industry has exploded. Yet, although US miners represent more than a third of the global Bitcoin network’s hash power, they rely on Chinese manufacturers for their equipment.
When Bitcoin was first conceived in 2008, Satoshi Nakamoto’s vision for a decentralized payment system powered by a network of CPUs inspired a global community of enthusiasts to run the blockchain’s software on their home computers.
As a market for Bitcoin developed and the community grew, attention turned to maximizing efficiency. By 2010, for example, miners were discussing how to use their computers’ video cards rather than CPUs, determining that the larger number of Arithmetic/Logic Units in GPUs made them better suited to the intensive but repetitive work of Bitcoin mining.
The next big leap came in 2012, when a member of the bitcointalk forum based in China announced their intention to design and manufacture an Integrated Circuit for Specific Applications (ASIC) to further optimize the mining process.
It didn’t take long for ASIC mining to take over, and in 2013 the first dedicated Bitcoin mining rig hit the market courtesy of the Beijing-based firm Canaan Creative.
That same year, two Chinese entrepreneurs founded Bitmain, which would go on to become the world’s largest manufacturer of Bitcoin mining hardware.
Between Canaan, Bitmain, and MicroBT, which entered the space in 2016, Chinese firms now dominate the global market for mining equipment. However, a new US startup has recently entered the fray.
Based in Silicon Valley, Auradine’s founders come from a background in cutting-edge digital technology companies.
As CEO Rajiv Khemani explained to CCN, he and his fellow founders – former Palo Alto Networks Vice Presidents, Patrick Xu and Barun Kar – have focused on digital infrastructure since the nineties. “And by infrastructure, I mean, silicon systems and software that drives the internet forward,” he said.
In early 2022, the inspiration for Auradine came from a simple question: which technologies will support the future of the Internet? “As we looked at the future,” Khemani went on, “blockchain and web3 technologies were one area where we thought we could make an impact.”
After realizing they wanted to build a Web3 infrastructure business, the three men observed that building mining rigs were just a handful of companies, presenting an opportunity to disrupt the market with a new product.
What’s more, “nearly 100% of ASICs that drive Bitcoin mining come from one country – China,” Khemani remarked.
“That’s really not a good thing for decentralization and the security and stability of the Bitcoin blockchain,” he added.
Setting out to build an American company that could rival established players and secure supply chain resilience for Bitcoin miners in the US, Auradine raised $81M to kickstart production in May. The startup’s investors included Marathon Digital, whose current fleet of mining rigs consists mostly of Bitmain Antminers.
In a bid to gain an edge over the Chinese competition, Auradine’s American-engineered ASIC units deliver several efficiency-boosting innovations to help miners optimize their electricity usage.
When the company designed its equipment, it took into consideration the dynamic, flexible mining operations in places like Rockdale, where Riot has made significant efficiency gains by syncing its capacity with local peaks and troughs in demand. As Khemani noted, Auradine’s rigs can be controlled “at a very granular level,” but via API calls that allow oversight of an entire data center.