Going Big – Hut 8 Purchases 12 More BlockBoxes

Hut 8 is already the world’s largest cryptocurrency miner by market capitalization and operating capacity standards. Now it is poised to grow its capacity in a bid to become the world’s largest Bitcoin miner. This ambitious plan begins with the purchase and integration of 12 new BlockBoxes to its facility in Drumheller, Alberta, Canada.

Hut 8 currently has 73 BlockBoxes in both of its mining facilities in Medicine Hat and Drumheller. The company’s recent acquisition of 12 more BlockBoxes will see it operating a total of 85 BlockBoxes.

Plans are currently underway to upgrade the new BlockBoxes, all purchases from Bitfury. Bitfury is currently installing new Bitfury Clarke ASIC chips that will increase each BlockBox’s speed and power to 12 petahash per second. Combined, all BlockBoxes will boost the company’s overall operating capacity to 144PH/s to bring its total mining capacity to about 100.3 MW – this is approximately 784 PH/s. All these figures translate to an increase of about 20% in operating and production capacity.

Andrew Kiguel, the CEO and President of Hut 8, exuded excitement when commenting on the recent upgrades.

“We are set to become the largest miner of Bitcoin in the world,” said Kiguel when speaking to interviewers.

He was especially confident that the company’s recent purchase of more BlockBoxes would solidify its position in an increasingly competitive market.

Hut 8 has mined about 4,400 Bitcoins so far since beginning operation at the end of 2017. It expects to crank these numbers up swiftly now that it has more BlockBoxes. The BlockBoxes are expected to be fully operational towards the end of 2018.

The 12 new BlockBoxes will set Hut 8 back to $13 million. This is a hefty price tag, but the company already has a payment plan in place. It will consist of 3 financial arrangements:

A huge chunk of the bill will be financed through a loan acquired from Bitfury, the manufacturer of the BlockBoxes. Hut 8 will take out a loan of $9 million from Bitfury. The loan will carry a 2-year term for the first $6 million and come with a 12% coupon. It will also be unsecured.

$2 million will be paid in Hut 8’s public shares at a price of $3.15 per share – this translates to a little under 1 million shares.

Finally, $2 million of the bill will be paid in cash by the Hut 8 Group.

Hut 8 also stands to save up to $500,000 annually following better relations with Bitfury owing to this deal. Bitfury, which is responsible for providing management and maintenance services for hut 8’s BlockBoxes, will lower its monthly fees from $2,500 to $2,000 per BlockBox. Hut 8 is also looking forward to many other bonuses and promotions as both companies forge greater ties.

Hut 8 is already the largest cryptocurrency miner in Canada and is poised to take on the world with its recent expansion. The 12 new BlockBoxes from Bitfury will boost the company’s operating and production capacities by over 20%.

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