Core Scientific, a previously bankrupted company that mines digital assets, has announced a new collaboration with Bitmain, a significant supplier of Bitcoin mining and artificial intelligence (AI) computing technology.
As part of the agreement, Bitmain will contribute $53.9 million to the growth of their long-standing partnership.
Core Scientific’s spokesperson told CCN that the company has proposed a business plan that positions it to create value after emergence, thereby benefiting all stakeholders.
“We believe this is a realistic plan that we are capable of executing, recognizing that we cannot control the price of Bitcoin, global network hash rate or the cost of power,” the spokesperson stated.
The company added that, through the executing its plans and delivering profitable growth, it believes that the markets will recognize its value creation potential. In August, the company added, Core Scientific operated approximately 206,000 owned and colocated bitcoin miners, produced 965 self-mined Bitcoin and an estimated 403 Bitcoin from colocated miners.
Core Scientific’s spokesperson told CCN that the company treats this as a long-standing partnership that it will continue to expand as it continues to work together to enhance the stability, strength and professionalism of the Bitcoin Network.
Bitmain did not immediately respond to a request for comment.
Bitmain will supply 27,000 Bitmain S19J XP 151 TH mining servers for $23.1 million and acquire Core Scientific stock worth $53.9 million, with stock value determined by Q4 2023 bankruptcy court decision.
On the other hand, Core Scientific will restructure operations and support Bitmain’s mining efforts with cash/equity deal and existing hosting agreements. Due to this progress, the mining sector in North America may develop even further thanks to top-notch machinery and a well-defined expansion plan.
Since it started its mining operations in 2017, Core has deployed approximately 600,000 Bitmain miners, with Bitmain S19 models accounting for about 99% of the company’s hosting clients.
The mining company declared bankruptcy in December of last year as a result of declining income and increased energy costs.
According to the Chapter 11 reorganization plan, whose approval may arrive in the fourth quarter of this year, a bankruptcy court will evaluate the company’s stock worth per share.
In a challenging environment for crypto mining, both companies view the transaction as beneficial to their long-term strategies.
Speaking on the agreement, Max Hua, the CEO of Bitmain, emphasized their long-standing partnership with Core and successful track record over the years.
“We look forward to deepening our strategic relationship with Core Scientific, our long-standing U.S.-based partner. Their professionalism, integrity, and commitment to the success of their hosting customers and the growth of the Bitcoin Network is unsurpassed in the industry,” Hua stated .
Hua added Core Scientific is of utter importance to the Bitcoin network and confirmed there is a need for establishing the blockchain’s maximum potential.
Regarding the Core Scientific company, CEO Adam Sullivan says it is basically a platform for growing their fleet as they get ready for the subsequent halving.
“We are honored to expand our significant relationship with Bitmain. Together, we have worked tirelessly to professionalize our industry, charting a path for the long-term growth of the Bitcoin Network as Bitcoin adoption increases around the world,” he commented .
Many mining firms borrowed heavily during the 2021 bull market for equipment and infrastructure, but some filed for bankruptcy after the collapse of exchanges like FTX and Celsius.
With the bear market, high Bitcoin hash rates, and uncertain profitability, the industry is questioning miners’ ability to remain profitable. Regardless, mining companies are shifting towards alternative energy sources to cut costs, secure profits, and reduce environmental impact.
Mainstream circles have always seen Bitcoin mining as a wasteful activity that harms the environment, although facts and analysis show that the sector has similar consequences to those of traditional industries.
The Cambridge Bitcoin Electricity Consumption Index (CBECI), which tracks Bitcoin network energy usage, now includes additional metrics, including one for Bitcoin greenhouse gas emissions, thanks to researchers at the Centre of Alternative Finance.
According to the researchers, Bitcoin miners have strong reasons to use renewable and underutilized energy sources.