It was announced that Genesis Digital Assets buys ASICs from Canaan to be able to compete in the Bitcoin mining industry. This announcement has caused some controversy in the community, with some users feeling like this will set a precedent for other companies to do the same thing which could lead to monopolization of mining.
Genesis Digital Assets buys ASICs to Expand Bitcoin Mining
Bitcoin mining is a lucrative industry. Mining farm owners, on the other hand, must make considerable expenditures in order to remain competitive. Mining machinery, in fact, run continually and wears out rapidly.
Furthermore, in order to remain lucrative, miners must continuously purchase the most up-to-date equipment. As a result, mining firms often place orders worth tens of millions of dollars.
Genesis Digital Assets is one of the few companies that manufactures and sells digital assets mining equipment such as GPUs. The demand for these products has been steadily increasing in the past few months due to the cryptocurrency craze and recent price surge. Therefore, restocking them became a priority for Genesis Digital Assets.
Genesis Digital Assets, a Precursor to Bitcoin Mining
Genesis Digital Assets (previously Genesis Mining) is one of the most established Bitcoin mining firms. Genesis Digital, which was founded in 2013, has played a significant role in the development of digital asset mining. Indeed, the Icelandic firm was the first to employ cloud mining.
Throughout its existence, the firm has developed around 20 mining facilities and employed over 250,000 mining equipment of various generations. Despite the fact that its own mining did not commence until 2017, Genesis Digital Assets has mined more than $1 billion in BTC. The name change that coincided with the company’s expansion also enabled it to raise $125 million to continue its expansion.
Genesis Digital Assets has won a dispute in China’s Supreme People’s Court involving the seizure of 500,000 video cards in 2018. Genesis Digital Assets, formerly known as Genesis Mining, has been accused by its provider of failing to pay its power bills since September 2018. As a result, the supplier, Chuangshiji, ended the business connection and took advantage of the chance to take the mining equipment and utilize it in its own name.
The firm filed a lawsuit in 2019 demanding the restitution of 560,000 video cards and 60,500 AntMiner S9 machines. The Chinese Supreme Court eventually ordered the repatriation of 485,681 video cards in a decision dated June 23, 2021. The electricity supplier has already sold the remaining devices.
Genesis Digital Assets bought 20,000 ASICs from Canaan
Genesis has recently announced that it will increase its mining capacity in response to this dire situation. This is exactly what has been done by the company. Genesis Digital Assets bought 20,000 ASICs from Canaan.
The company was also given the option to acquire an additional 180,000 ASICs from Canaan. Despite this, neither party indicated which models were going to be ordered, nor what the contract was going to cost.
The possibility of exercise of the option would make this to be ASIC’s biggest order to date. The new agreement comes as a result of a $93 million order Genesis placed with Canaan back in April.
Abdulmalik Mirakhmedov, founder and CEO of Genesis Digital Assets, made the following remarks today:
“Our strategy has always been to grow faster than the rest of the market. To achieve that goal, we need to build and launch new data centers, expand the capacity of existing facilities and install best-in-class equipment. Our recent orders from Avalon Miners of Canaan will help us at least double our hash rate over the next few months.”
As the Chinese hegemony in Bitcoin mining has ended, a race for mining power has begun among the various miners. It is indeed true that the exodus of Chinese mining operators has created a void which is being filled by miners from around the world, using as much computing power as possible.