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PoW Mining Update – Canadian Moratoriums, Northern Data Debt Free, Greenidge Restructuring, and More




Another week has passed, and another batch of developments to come out of the PoW mining sector is here, including yet another moratorium on the practice, hashrate benchmarks, and more.

Northern Data

While industry giants like Core Scientific file for bankruptcy amidst a lingering downmarket, a few industry bright spots remain.  One example of which comes from Northern Data – a Bitcoin mining outfit based out of Frankfurt, Germany.

In its most recent communication with shareholders, Northern Data spoke to the hardships it has endured over the past year, and their effect on its competitors.

“This year has seen a geopolitical turning point, with interest rate increases in full force, and global inflation rate highs that have had a brutal effect across markets. Looking objectively at the circumstances under which we have had to operate, not much more could have worked against us.

Despite these fierce headwinds, which have already adversely affected and removed many of our competitors from the market, we have continued to focus on our core business and have taken advantage of the market challenges to reposition ourselves and become even more robust.”

Due to its approach to operations since setting up shop, Northern Data indicates that despite turbulent markets, it finds itself in strong financial position.

“Northern Data is not carrying financial debt and therefore has access to the unique opportunity to consolidate and expand our current position in BTC mining while scaling cloud solutions and colocation services in parallel.”

As it stands, the company is not only looking to take advantage of rock-bottom pricing on ASIC devices, but is also renegotiating electricity contracts – both crucial for establishing itself as much as possible leading up to the next halving in 2024.

British Columbia Suspends Mining Applications

Proof-of-Work mining is energy intensive, there is no questioning that.  This means that in areas which rely on dirty fuel sources (coal) to generate electricity, the practice can be quite harmful for the environment.  Looking deeper though, and PoW mining may not be as bad as many make it seem.  These may include,

  • utilizing waste energy
  • monetizing heat generation
  • stabilizing power grids

This has not stopped various Provinces and States within North America from imposing a moratorium on the practice though.  The approach, which first began in New York, then found its way to Manitoba, has now reach British Columbia.

The Canadian Province of British Columbia noted various reasons in a recent communication for why it was placing an 18month suspension of new requests for mining operations.

“We are suspending electricity connection requests from cryptocurrency mining operators to preserve our electricity supply for people who are switching to electric vehicles and heat pumps, and for businesses and industries that are undertaking electrification projects that reduce carbon emissions and generate jobs and economic opportunities.”

As it stands, BC Hydro, the major electricity provider in the Province, indicates that it already services 7 mining operations, with another 6 ready to go live in the near future.

CleanSpark Hashrate

Recently, we touched on CleanSpark and its updated forecast for growth in 2023 which will see a drop of roughly 28.5% from original expectations for hashrate growth.  However, now that year-end is here, many companies are taking the time to look back at how they fared throughout 2022 – one of the more trying years in recent memory within the digital asset sector.  CleanSpark did just that, and was able to boast some impressive growth figures despite continued market headwinds.

“As we said on our earnings call last week, we expected to hit 6 EH/s before year’s end and today we are pleased to announce that we have,”

Overall, CleanSpark indicates that this growth equates to a three-fold increase in just one years time.  If all goes well, it hopes to repeat this rate of growth over the course of 2023.

Greenidge Generation Restructuring

As of December 19th, Greenidge Generation indicated in a filing with the SEC that it has come to an agreement on a major debt restructuring plan with lender NYDIG.  This deal will see the restructuring of roughly $75M in debt, and involve not only the sale of equipment, but also various hosting services.

“Under the Term Sheet, it is contemplated that Greenidge would reduce its debt by approximately $57 to $68 million in exchange for a substantial number of its miners, transfer credits and coupons that have accrued to Greenidge under its non-fixed price purchase contracts with Bitmain Technologies, Ltd. and transfer Greenidge’s acquired mining infrastructure awaiting deployment at potential mining sites within three months following the completion of debt restructuring and hosting agreements”

The restructuring of this debt is not enough to save the company though, as it further addressed its liquidity, stating that,

“In the absence of additional liquidity, the Company is at risk of having insufficient cash to support ongoing business operations within the next two months. Assuming NYDIG and Greenidge enter into definitive agreements reflecting the terms described in this release, to remain viable through 2023, the Company currently estimates it will require at least approximately $20 million of additional liquidity to fund its cash requirements, although this estimate is subject to a number of assumptions and may vary materially.”

With the current cost of mining BTC far outweighing their value on the open market, it appears that the mining sector has become a game of last-man-standing, forcing restructuring plans as mining outfits try to outlast their competitors and see another day.