Hardware

Blockstream targets continued Bitcoin miner surplus with Series 2 BASIC Note

Blockstream CEO Adam Back says 2023 presented a unique investment opportunity with Bitcoin’s price doubling amid low ASIC miner prices on secondary markets.

Blockstream will look to raise more capital to buy Bitcoin (BTC) mining hardware through a second series of its Blockstream ASIC (BASIC) Note offering, which aims to accumulate and sell ASICs based on the predicted demand for miners over the next two years.

Speaking exclusively to Cointelegraph, Blockstream CEO Adam Back highlighted a surplus of Bitcoin mining hardware on the secondary market as a critical driver for a second series of its investment offering.

Blockstream wound up an initial $5-million raise, which saw the firm purchase unused, boxed Antminer S19k Pro ASIC miners for $4.87 million. The company managed to secure the hardware, one of the Chinese manufacturer’s most popular miners, through SunnySide Digital.

Iran court orders the release of seized crypto mining equipment

Judicial rulings require Iranian authorities to release a part of the 150,000 crypto mining equipment previously seized due to energy concerns.

Iranian authorities seized numerous crypto mining equipment over the past two years, citing stress on energy grids during winter. Now, a court ordered the release of crypto-mining equipment that was previously seized as a measure to conserve energy.

Since 2021, Iran’s Organization for Collection and Sale of State-Owned Property (OCSSOP) has seized mining equipment — both authorized and unauthorized — due to looming power shortage concerns. However, the authorities had a change of heart amid winter as they ordered the release of the seizure. As explained by Abdolmajid Eshtehadi, the head of Iran’s Ministry of Economic Affairs and Finance:

“Currently some 150,000 crypto mining equipment are held by the OCSSOP, a large part of which will be released following judicial rulings. Machines have already been returned.”

However, Eshtehadi believed the recently released mining equipment could add stress to the country’s energy grids. He suggested that the Generation and Transmission Company of Iran (TAVANIR) must propose plans for the use of the hardware to avoid undue stress on the nation’s grid system.

*Country-wise Bitcoin hash rate contribution. Source: Cambridge Center for Alternative Finance*

Back in June 2022, Iran had to cut the power supply for legal mining firms as the country’s electricity consumption recorded an all-time high of 62,500 megawatts (MW) during peak consumption. At the time, Iran used to account for 0.12% of the global Bitcoin (BTC) hash rate, which has now increased to 0.2%, as shown in the above graph.

Iran’s energy concerns become evident when considering the recent laws imposing a fine for the illegal use of subsidized energy in crypto mining.

On the flip side, Denver-based Crusoe Energy aims to help Oman, a gas-rich Middle Eastern country, cut down on gas flaring — the burning of natural gas associated with oil extraction.

Crusoe Energy announced plans to open up a pilot project in Muscat, Oman, to repurpose the gas flaring energy into powering mining computers. This initiative will aid Oman’s goal of zero-gas flaring by 2030.

‘Father of the iPod’ helps Ledger create new cold crypto wallet

Tony Fadell, the man behind the iPod, iPhone and Nest Thermostat, collaborates with major crypto wallet firm Ledger to build a new cold wallet.

Hardware wallet provider Ledger, known for its cold-storage devices, announced its seventh crypto wallet in collaboration with the creator of the original iPod.

Tony Fadell, the inventor of the iconic iPod Classic model, has partnered with Ledger to help the company design its latest wallet device known as Ledger Stax. The company broke the news on Dec. 6 at Ledger’s bi-annual Web3 developer event, Ledger Op3n, in Paris.

Ledger’s upcoming new hardware wallet is a credit card-size device that features a large E Ink display, capacitive touch, Bluetooth support, wireless charging and more.

For the first time in Ledger’s product line, Stax contains a curved E Ink display which can be used to show the holder’s name or other wallet information, just like a book spine. The device is also equipped with magnets, allowing users to organize the storage of multiple similar devices and “stack” them in order, and that is why Ledger Stax was called so.

When designing the device, Fadell thought about what the modern stack of cash would look like. “He thought about it in two ways — the spine of the device is like the band around the stack of cash which shows you what’s inside, and you can stack them together using the magnets,” a Ledger spokesperson said in a statement to Cointelegraph.

*Ledger Stax hardware wallet. Source: Ledger*

Fadell, who also worked on the first three generations of the iPhone, designed Ledger Stax in cooperation with the industrial design firm Layer. “We need to be user-friendly… no! A ‘user-delightful’ tool, to bring digital asset security to the rest of us, not just the geeks,” the ‘Father of the iPod’ said.

According to the announcement, Ledger Stax will be available in Q1 2023, and customers can now pre-order the wallet on Ledger’s official website. In the future, it will be available from select retailers such as BestBuy in the United States.

The Ledger Stax wallet is priced at $279, a spokesperson for Ledger told Cointelegraph. The device is significantly more expensive than Ledger’s previous wallet, the Ledger Nano S Plus. Officially released in April 2022, Nano S Plus costs $79 at the time of writing. The previous iteration, Nano X, is priced at $149.

According to Ledger, the latest wallet product is designed to make interacting and signing transactions easier with a touch screen and a larger display. “Ledger Stax adds to our lineup, rather than replacing anything, allowing customers to choose the kind of experience they want,” the firm’s representative said.

Trezor reports 300% surge in sales revenue due to FTX contagion

The hardware wallet firm is certain that the latest uptick in demand is a result of investors rescuing their funds in the aftermath of the FTX failure.

Amid growing concerns over centralized cryptocurrency exchanges in the wake of the FTX crisis, investors are increasingly moving to hardware crypto wallets.

A major hardware wallet provider, Trezor, has recorded a major uptick in wallet sales in the aftermath of the FTX contagion, the firm’s brand ambassador Josef Tetek told Cointelegraph on Nov. 15.

Trezor saw its sales revenue surge 300% week-on-week and it’s still growing, Tetek reported, adding that the current sales are higher than a year ago when Bitcoin reached its all-time highs at $68,000. Trezor has also recorded a significant spike in its website traffic, which increased 350% over the same period, the exec noted.

According to Tetek, Trezor is quite certain that the uptick in new wallet users was a result of issues with FTX, a crypto exchange at the center of the latest industry scandal involving the misappropriation of user funds. The spike in demand for Trezor wallets started early last week, exactly when “rumors of the FTX insolvency started circulating,” Tetek reported.

Trezor expects further growth in new users in the near future as the failure of middlemen in crypto would only continue to unfold, Tetek suggested, stating:

“We expect this trend to continue in the short to mid term, as the contagion of FTX failure continues to unwind and Bitcoin or cryptocurrency holders lose trust in custodians and finally start to explore their options to self-custody their digital assets.”

According to the executive, Trezor is able to satisfy current levels of demand in the short to medium term. “Even if sales continue at this elevated rate, we are confident there would be a limited impact on our stock in the longer term, as we were already planning for an uptick in sales,” Tetek said. He also noted that Trezor doesn’t plan to increase the prices for its hardware wallets in line with its vision to make “self-custody accessible to all.”

Despite the spike in demand and the associated increase in support requests, Trezor isn’t planning to expand its hiring. “We did not have to downscale as we were prepared for a prolonged and deep bear market,” Tetek stated, adding that Trezor currently employs a total of 100 people working in multiple locations, with the majority based in Prague.

Cryptocurrency investors have been increasingly moving to self-custody with software and hardware wallets, with exchange outflows nearing all-time highs by mid-November 2022.

Ledger, a major rival hardware wallet supplier, has recorded a significant surge in demand for its devices recently as well. The French cold wallet firm saw one of its highest traffic days ever shortly after FTX stopped all crypto withdrawals last week, triggering inventors to offload their funds from exchanges to cold storage as soon as possible.

Amid the ongoing FTX contagion, even some of the biggest crypto exchanges started promoting the need for self-custody. Binance CEO Changpeng Zhao admitted on Nov. 14 that centralized exchanges may no longer be necessary as investors would shift to self-custodial solutions like hardware or software wallets.

“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to exist, which is great,” the CEO said.

Ledger hardware wallets hit by the FTX earthquake — CTO

Some Ledger users weren’t able to process withdrawals using Ledger Live on Wednesday, according to social media reports.

Hardware-based cryptocurrency wallet provider Ledger has experienced some issues due to massive outflows from crypto exchanges amid the FTX bloodbath, according to its chief technology officer.

Ledger saw a “massive usage” of their platforms and suffered a “few scalability challenges” on Nov. 9, Ledger chief technology officer Charles Guillemet reported in a statement on Twitter.

Guillemet reasoned Ledger’s issues by the outcomes of the ongoing crisis of a major global cryptocurrency exchange, FTX. The chief technology officer said that crypto investors have been increasingly offloading their holdings from crypto exchanges to Ledger, stating:

“After the FTX earthquake, there’s a massive outflow from exchanges to Ledger security and self sovereignty solutions.”

According to Guillemet, Ledger should have resolved the outages as of 5:30 am UTC.

Ledger first reported the wallet issues on Nov. 9 at around 11:00 pm UTC, officially announcing that its hardware wallet interface application Ledger Live was experiencing downgraded server performance.

“Specific issues may vary, including connecting to the My Ledger tab and performing a Genuine Check,” Ledger said in a tweet, adding that the client’s assets were safe.

The hard wallet company subsequently took to Twitter to announce that it fixed the server outage about one hour after detecting the issue. “Our server outage has been resolved and all systems are operational,” Ledger said, adding that their server outage was resolved and all systems were operational.

Previously, Ledger Support also announced that it also temporarily paused FTX and FTX.US swaps on Ledger Live. Ledger launched the swap integration with FTX in July 2022.

According to Ledger’s Twitter thread, the outages caused some users to be unable to send any transactions using Ledger Live, including withdrawals.

The crypto community was quick to react to the issues despite many staying confident about Ledger’s operations amid the larger market issues. Some industry observers criticized Ledger for choosing the wrong wording to communicate with their customers amid the ongoing issues at FTX. People apparently got triggered by Ledger’s wording “assets are safe” as FTX founder Sam Bankman-Fried made a similar statement on Twitter on Nov. 7, only to delete it a day after.

“FTX is fine. Assets are fine,” Bankman-Fried declared in his tweet, just hours before the exchange stopped all crypto withdrawals after becoming unable to process such transactions.

The recent issues on Ledger Live came as Ledger saw one of its “highest traffic days ever,” Ledger’s chief technology officer told Cointelegraph. “Traffic has increased significantly over time, even without major industry events,” he noted, adding that Ledger also previously saw plenty of traffic spikes after Celsius bankruptcy, the Solana hack as well as the FTX bank run.

Guillemet also said that Ledger Live had an “unusual load on the device manager service,” which is likely to be attributed to users updating their device for the first time in a while or using a brand new device for the first time. “It was quickly resolved and the team is already working on improving automatic detection and restoration,” he added.

A major rival cold wallet provider, Trezor, has not recorded any issues due to the FTX issues so far, Trezor executive Josef Tětek told Cointelegraph. “The only way to avoid these massive blow-ups is to understand self-custody as a necessity,” the exec stated. “Not an option; a true necessity,” he emphasized.

Despite self-custody being associated with its own set of risks, many crypto people, including Tether and Bitfinex chief technology officer Paolo Ardoino, still recommend users “always to self custody in cold storage” if they want to hold their Bitcoin (BTC) and crypto.

CleanSpark acquires mining facility in Georgia for $33 million

This is the second deal the company announced this week citing “substantially discounted price.”

Crypto mining firm CleanSpark announced an agreement on Friday to acquire Mawson’s Bitcoin mining facility in Sandersville, Georgia for $33 million. The deal is anticipated to increase CleanSpark’s hash rate by 1.4 exahashes per second (EH/s) in the next few months, and to 7.0 EH/s by the end of next year.

As part of the agreement, 6,468 last-generation mining ASICs will be purchased for $9.5 million, or $17 per terahash. “These machines, already operating at the acquired site, will add over 558 petahashes per second (PH/s) of computing power immediately upon closing,” the company explains.

For the facility and miners, CleanSpark will pay up to $42.5 million, including up to $11 million in CleanSpark stocks and $4.5 million in earn-out commitments. The site in Georgia can support 24,108 latest-generation miners and the company plans to expand to support 70,000 miners producing over 7.0 EH/s in 2023.

G’day mate. $CLSK has agreed to acquire Australian-based @Mawsoninc‘s #bitcoin mining facility in Sandersville, GA. This marks our 4th site in the state & it’s expected to support 7.0 EH/s of our #hashrate.

More info: https://t.co/C9c20IYIhW #renewables #btc #sustainability pic.twitter.com/mdLmwtC5eK

— CleanSpark Inc. (@CleanSpark_Inc) September 9, 2022

CleanSpark has accelerated its consolidation in a bear market with high energy costs. On Thursday, the company announced a purchase agreement with Cryptech Solutions for 10,000 Bitmain Antminer S19j Pro units for a total price of $28 million.

In July, CleanSpark disclosed the purchase of over 1,000 Bitcoin miners from Whatsminer M30S at a “substantially discounted price.” In June, the mining company also bought 1,800 Antminer S19 XP rigs.

During the bull market, the company focused on building infrastructure before ordering equipment months in advance. “This strategy positioned us to make purchases of landed rigs at significantly lower prices, thus reducing the time between deploying capital and hashing, accelerating our return on investment,” said Zach Bradford, CEO of CleanSpark.

Ledger reportedly seeking additional $100 million in funding

Investors are said to be flocking to cold storage for their cryptocurrency as liquidity concerns plague the industry recently.

Having raised a mammoth $380 million funding at a $1.5 billion valuation in June, French cryptocurrency hardware wallet maker Ledger is looking to raise an extra $100 million, according to a Monday report from Bloomberg.

In June, Ledger raised $380 million in a funding round led by 10T Holdings. Now, according to reports, the company is seeking an additional $100 million to help it continue its rapid expansion. Business is said to be thriving as investors seek cold storage for their cryptocurrency, according to sources quoted by Bloomberg.

Hardware storage wallets from Ledger are a type of offline storage that isn’t connected to the internet, making them more secure against hacking than online wallets. This allows users to manage their own cryptocurrency without worrying about their provider’s liquidity.

The company’s products have been popular in recent years as investors seek to protect their digital assets from the hacks and liquidity problems that have plagued the cryptocurrency industry recently. Ledger’s business is reportedly expanding at a time when lenders and exchanges are experiencing liquidity concerns, according to Bloomberg’s source.

Cryptocurrency businesses in distress frequently stop client withdrawals to avoid a bank run. Singapore’s Zipmex is the most recent example, but lenders including Vauld and Celsius have both utilized the technique recently, with the latter filing for bankruptcy shortly after. Such concerns have driven thedemand for hardware wallets as a way to store digital assets offline and away from the potential liquidity issues.

While Ledger is said to be seeking more funding, the company has not commented on the reports. The hardware wallet provider is one of the most well-funded companies in the cryptocurrency industry, and its products are some of the most popular on the market. The wallet provider has also extended into crypto debit cards. The Crypto Life (CL) card was launched on the Visa network last December and instantly crypto into fiat from a safe wallet when used to pay merchants.

Bitcoin miner prices will continue to fall, F2Pool exec predicts

The majority of big crypto mining firms have sold their self-mined Bitcoin, while a few firms like Marathon, Hut 8 and Hive still hold on.

The price of cryptocurrency mining hardware is likely to continue falling in the near future amid the ongoing crypto winter, according to an executive at major Bitcoin (BTC) mining pool F2Pool.

Supporting 14.3% of the BTC network, F2Pool is one of the world’s biggest Bitcoin mining pools. On Tuesday, F2Pool released its latest mining industry update.

Focusing on June 2022 BTC mining results, F2Pool’s report noted that the majority of Bitcoin mining companies like Core Scientific have opted to sell their self-mined Bitcoin recently.

Bitfarms, a major Canadian BTC mining firm, sold 3,000 Bitcoin, or almost 50% of its entire BTC stake for $62 million ito reduce its credit facility in June.

“I have studied almost 10 publicly traded industrial miners and found that they are all very honestly telling everyone that they are selling self-mined Bitcoins,” F2Pool’s director of global business development Lisa Liu wrote in the report. She added that the proceeds are used to fund operating expenses and to grow capital, as well as to reduce obligations under equipment and facility loan agreements.

Liu went on to say that only a few publicly traded industrial miners claimed that they would stick with their long-standing HODL strategy. Those included firms like Marathon, Hut 8 and Hive Blockchain Technologies. “In particular, Hive surprisingly does not have significant debt, nor does it have equipment financing for ASIC and GPU equipment,” she added.

The executive also mentioned that the price of application-specific integrated circuit (ASIC) miners has dropped sharply over the past several months. By early June, the price of top and mid-tier ASIC miners reportedly plummeted 70% from their all-time highs in the $10,000–$18,000 range.

At the time of writing, Bitmain’s flagship miner Antminer S19 Pro is selling on Amazon in the $4,000–$7,000 range for used devices. A brand new device apparently still sells for more than $11,000.

ASIC prices will continue to fall even further, which could trigger a lot of new miners to exit mining, Liu predicted, stating:

“I think ASIC prices will continue to fall although they have already dropped rapidly since reaching the peak. If equipment owners cannot secure power and capacity at a competitive price level, a lot of newbies who hopped on the hash train last year are likely to be thrown off.”

Liu stressed that such a situation would be the “worst-case scenario” as F2Pool wishes to see “every miner go through this cold winter.”

As of mid-July, Bitcoin mining revenue dropped nearly 80% over a period of nine months, after reaching an all-time high of $74.4 million in October 2021. The sharp decline triggered a massive drop in the price of graphics processing units, which finally became more affordable after the global pandemic-caused chip shortage.

Global GPU price drops to compensate for falling Bitcoin mining revenue

The meteoric drop in GPU prices opened up a small window of opportunity for small-time miners to procure a piece of more powerful and efficient mining equipment.

As a direct result of falling Bitcoin (BTC) prices, total revenue earned by miners in transaction fees and mining rewards dropped to its one-year lows at nearly $15 million on July 4. However, a concurrent fall in graphic cards or GPU prices is set to help miners offset their operational costs amid an ongoing bear market.

Bitcoin mining revenue fell 79.6% over a period of 9 months, ever since reaching an all-time high of $74.4 million on October 25, 2021. In addition, a global chip shortage and the coronavirus pandemic shot up prices of the most important part of a mining rig — the graphics processing unit (GPU) — further impacting the miners’ bottom line.

*Bitcoin mining revenue over the past year. Source: Blockchain.com*

With card manufacturers resuming operations across the world, GPU prices have seen a massive decline with some cards selling for below MSRPs. In May alone, GPU prices dropped over 15% on average as supply exceeded the market demand. Moreover, the recent influx in GPUs has forced sellers on the secondary markets to bring down their exorbitant prices on used mining rigs.

*GPU price trend over the past one year. Source: TechSpot*

Cointelegraph previously reported that several public Bitcoin miners are well-positioned to survive the prolonged bear market as the low revenue continues to sustain the operational costs of the mining facilities. As shown below, Argo, CleanSpark, Stronghold, Marathon and Roit are some of the miners with a stable mining revenue to operational cost ratio — a fair indication of good health.

*Monthly operating cash flow vs. mining revenue. Source: Arcane Crypto*

Moreover, the meteoric drop in GPU prices opened up a small window of opportunity for small-time miners to procure a piece of more powerful and efficient mining equipment. Coupled with lower hash rate requirements of 203.6 exa hashes per second, miners now require lower computing power to successfully mine a block on the Bitcoin blockchain.

Despite the evident drop in mining revenue, Marathon Digital Holdings revealed to continue stacking BTC via mining while being “fairly well insulated and well-positioned.”

Speaking to Cointelegraph, Charlie Schumacher, vice president of corporate communications at Marathon Digital, shared insights on their overall operations:

“For reference, in Q1 2022, our cost to produce a Bitcoin was approximately $6,200. We also have fixed pricing for power, so we are not subject to changes in the energy markets.”

Alkemi Earn integration brings DeFi lending to 1.5M Ledger users

The objective of the Ledger project is to provide consumers with a way to purchase and use digital assets without giving up control to third-party platforms or systems.

The Alkemi Earn app has been added to the hardware wallet Ledger’s Discover area, making decentralized finance (DeFi) lending and borrowing service accessible to Ledger’s 1.5 million active customers.

According to a Tuesday announcement, users of Ledger Live can now earn yield on their assets with the Alkemi Earn integration. The goal of the Ledger project is to provide consumers with a method of buying and utilizing digital assets without giving them up to third-party platforms or systems.

“With Alkemi, Ledger users will have more ways to grow their assets while enjoying all the benefits of crypto without centralized custodians,” said JF Rochet, the vice president of international development for Ledger.

In February 2021, Ledger launched DeFi efforts with the open-source protocol WalletConnect, allowing users to access decentralized applications (DApps), such as Uniswap, 1inch and Curve.

Alkemi Earn is a lending protocol that enables institutions and retail borrowers to co-exist side by side. Alkemi allows institutions to put money into DeFi in a safe counterparty setting by providing both a Bank-Grade Verified pool and a permissionless Open pool. Since launching, the platform has amassed over $50 million in gross deposits. The integration with Ledger Live will likely attract even more users to the protocol.

Alkemi Network’s co-founder, Brandon Mahoney, emphasized that this process is more secure than other competitors’ products and solutions for noncustodial yield farming, stating that:

“’Not your keys, not your coins,’ as the saying goes. With this native integration into Ledger Live, Alkemi Earn unlocks a protocol-powered cash management experience for Ledger’s community. This is what bridging CeFi to DeFi is all about.”

Alkemi Earn’s ecosystem of products and services includes Ether (ETH), Dai (DAI), USD Coin (USDC) and wBTC as supported on-chain assets. Users can also earn ALK tokens by loaning and borrowing.

Staking is the process of delegating crypto to a staking validator to help secure a blockchain. It derives its name from the word “stake,” which refers to earning crypto profits and an associated passive revenue through a proof-of-stake consensus mechanism, as opposed to the Bitcoin (BTC) network’s mining-based proof-of-work.