Bitmine Immersion Technologies, Inc. operates as a blockchain technology company.
The company’s primary business is self-mining bitcoin for its own account, as well as hosting third-party equipment used in mining of digital asset coins and tokens, specifically bitcoin. The company’s facilities will be specifically designed and constructed for housing advanced mining equipment. The company’s data centers will provide power, racks, proprietary thermodynamic management (heat dissipation and airflo...
Bitmine Immersion Technologies, Inc. operates as a blockchain technology company.
The company’s primary business is self-mining bitcoin for its own account, as well as hosting third-party equipment used in mining of digital asset coins and tokens, specifically bitcoin. The company’s facilities will be specifically designed and constructed for housing advanced mining equipment. The company’s data centers will provide power, racks, proprietary thermodynamic management (heat dissipation and airflow management), redundant connectivity, 24/7 security, as well as software which provide infrastructure management and custom firmware that boost performance and energy efficiency.
The company plans to operate its data centers using immersion cooling technology. Immersion cooling is the process of submerging computer components (or full servers) in a thermally, but not electrically, conductive liquid (dielectric coolant) allowing higher heat transfer performance than air and many other benefits. Immersion cooling can be up to 95% more efficient than standard air cooling, producing an estimated PUE (power usage effectiveness) of 1.05. This cooler environment has been shown to extend machine lives by 30% or longer.
The company’s digital asset mining operation is focused on the generation of digital assets by solving complex cryptographic algorithms to validate transactions on specific digital asset network blockchains, which is commonly referred to as ‘mining.’ Mining requires the use of specialized computers equipped with application-specific integrated circuit (ASIC) chips (known as ‘miners’) to solve complex cryptographic algorithms in the support of the bitcoin blockchain (in a process known as ‘solving a block’) in exchange for digital asset rewards (to date, only bitcoin). Whether the company is hosting the company’s client’s computers or mining for the company’s own account with its own computers, the miners participate in ‘mining pools’ organized by ‘mining pool operators’ in which the company or its clients share mining power (known as ‘hash rate’) with the hash rate generated by other miners participating in the pool to earn digital asset rewards. The mining pool operator provides a service that coordinates the computing power of the independent mining enterprises participating in the mining pool. Fees are paid to the mining pool operator to cover the costs of maintaining the pool. The pool uses software that coordinates the pool members’ mining power, identifies new block rewards, and records how much hash rate each participant contributes to the pool. Pools typically pay rewards in different ways: as a percentage of the total reward received by the mining pool each day based on each pool participant’s proportionate share of hashing power provided that day (the ‘Pay-Per-Share Method’); or based on the theoretical reward the pool participant should have received each day based on its hashing power contributed to the pool each day times the difficulty index (the ‘Full-Pay-Per-Share Method’). The company only uses mining pools that pay rewards under the Full-Pay-Per-Share Method.
As the demand for digital assets increases and digital assets become more widely accepted, there is an increasing demand for professional-grade, scalable infrastructure to support growth of the blockchain ecosystem. The company expects to continually evaluate the performance of its data centers, including the company’s ability to access additional megawatts of electric power and to expand the company’s total self-mining and customer and related party hosting hash rates.
The company’s digital asset self-mining activity competes with a myriad of mining operations throughout the world to complete new blocks in the blockchain and earn the reward in the form of an established unit of a digital asset. Revenue from digital asset mining and hosting third party digital asset miners are impacted by volatility in bitcoin prices, as well as increases in the bitcoin blockchain’s network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.
As the demand for digital assets increases and digital assets become more widely accepted, there is an increasing demand for professional-grade, scalable infrastructure to support growth of the blockchain ecosystem. The company expects to continually evaluate the performance of its data centers, including the company’s ability to access additional megawatts of electric power and to expand the company’s total self-mining and customer and related party hosting hash rates.
The company also generates revenues from the advantageous purchase and sale of equipment used for digital asset mining and hosting. The company has relationships with some suppliers that enable the company to acquire highly desired equipment at attractive prices, which the company plans to resell to third parties. In most cases, resales of digital asset mining equipment would be to the company’s hosting customers, which have the dual benefit of generating short-term gross profits from the equipment sale, as well as growing the customer base of the company’s hosting business.
Trinidad Operations
The company initially decided to locate its initial facilities in Trinidad, because it has some of the cheapest electricity in the world due to its abundant supplies of oil and gas and because some of the company’s technical staff is located there. The company has entered into an agreement with Telecommunications Services of Trinidad & Tobago Limited (‘TSTT’), the largest and oldest telecom company in Trinidad, to co-locate up to 125 800 kw containers for hosting digital asset miners. TSTT has up to 93 potential locations for co-location of the company’s containers. Under the agreement, the company has the option, but not the obligation, to co-locate containers at the company’s own pace.
In October 2022, the company completed the installation of initial hosting containers under the company’s agreement with TSTT.
While the company’s TSTT site was delayed pending electrification, the company entered into a hosting agreement with a third party in Trinidad to host up to 192 miners in one immersion container until December 31, 2024. In July 2024, the company foreclosed on the containers as a result of a default by the third party on the note. The company moved its miners to its existing TSTT site, where the company had 440 operational miners as of December 5, 2024. The company is evaluating other TSTT sites as a location for the two repossessed immersion containers.
The company is also leasing space from a third party on an at-will basis to co-host 60 miners. The company ultimately intends to move all of its miners in Trinidad to the company’s TSTT hosting facilities.
Despite the expective favorable resolution of the company’s dispute in Trinidad, the company is focusing its efforts on the development of hosting centers in the United States and Canada, both directly and in joint ventures with third parties. The company is exploring situations where medium to long-term power agreements may be available at affordable prices, whether using traditional power sources, such as coal or natural gas, as well as environmentally friendly sources, such as hydroelectric, wind and solar-backed projects, which might allow the company to generate collateral revenue from the sale of excess power to the local utility grid and from the generation of saleable carbon credits.
Pecos, Texas Operations
In October 2022, the company entered into a joint venture arrangement with ROC Digital Mining Manager LLC (‘ROC Manager’) to jointly develop and operate a bitcoin mining operation in Pecos, Texas.
The company owns 33 1/3% of ROC Manager. ROC Manager is managed by from one to three managers selected by a vote of the members. The company does not have a representative or designee serving as manager of ROC Manager.
As of December 5, 2024, the company had deployed 96 Antminer S-19 pro miners to the company’s hosting container at the site. The joint venture initially filled its six immersion containers with ASIC miners provided by hosting clients, although most of the hosting clients agreements terminated in April 2024. Approximately five of the hosting containers owned by the joint venture are fully or partially occupied by clients, although the joint venture is aggressively trying to fill the remaining capacity with hosting clients. The joint venture also owns two immersion containers which are not installed, but will be if hosting demand warrants.
On April 29, 2024, the joint venture executed an energy services agreement for the site that runs from May 1, 2024 to April 30, 2025. In April 2024, the company renewed its hosting contract with the joint venture for an additional year.
Murray, Kentucky Operations
On October 4, 2023, the company purchased 1,050 used ASIC miners from Luxor Technology Corporation (‘Luxor’), and simultaneously entered into a Co-Location Services Agreement to host the miners at a hosting facility owned by Soluna SW, LLC (‘Soluna’) in Murray, Kentucky. The company subsequently added 45 ASIC miners in May 2024 that the company purchased from Soluna. The hosting agreement with Soluna has a term of 18 months, and provides that the company is obligated to reimburse Soluna for the actual cost of the electricity used by the company’s machines and pay a hosting fee equal to 50% of the net profit generated by the machines each month. The hosting fee is payable in bitcoin.
Revenue Sources
The company’s revenue will consist primarily of bitcoin generated from the company’s self-mining operations, and secondarily from sales of mining equipment. The company also may generate revenue from hosting fees to the extent the company enter into hosting contracts with third party miners.
Digital asset mining income. The company conducts proprietary digital asset mining operations using specialized computers equipped with application-specific integrated circuit (ASIC) chips (known as ‘miners’) to solve complex cryptographic algorithms in the support of the bitcoin blockchain (in a process known as ‘solving a block’) in exchange for digital asset rewards (to date, only bitcoin). The company participates in ‘mining pools’ organized by ‘mining pool operators’ in which the company shares its mining power (known as ‘hash rate’) with the hash rate generated by other miners participating in the pool to earn digital asset rewards. The mining pool operator provides a service that coordinates the computing power of the independent mining enterprises participating in the mining pool. Fees are paid to the mining pool operator to cover the costs of maintaining the pool. The pool uses software that coordinates the pool members’ mining power, identifies new block rewards, and records how much hash rate each participant contributes to the pool. Pools typically pay rewards in different ways: as a percentage of the total reward received by the mining pool each day based on each pool participant’s proportionate share of hashing power provided that day (the ‘Pay-Per-Share Method’); or based on the theoretical reward the pool participant should have received each day based on its hashing power contributed to the pool each day times the difficulty index (the ‘Full-Pay-Per-Share Method’). The company only uses mining pools that pay rewards under the Full-Pay-Per-Share Method. Revenues from digital asset mining are impacted by volatility in bitcoin prices, as well as increases in the bitcoin blockchain’s network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.
Equipment sales to customers and related parties. Equipment sales to customers and related parties is derived from the company’s ability to leverage the company’s partnerships with leading equipment manufacturers to secure equipment in advance, which is then sold to the company’s customers and related parties. The company’s equipment sales are typically in connection with a hosting contract, but the company has sold equipment to parties that are not hosting customers where the terms are attractive.
Hosting revenue from customers and related parties. Hosting revenue from customers and related parties is based on consumption-based contracts with the company’s customers and related parties. Most contracts are renewable, and the company’s customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which vary from one to three years in length. The company’s typical agreement provides for full reimbursement of the client’s share of electricity costs of the hosting facility, and a percentage of bitcoin generated by the client’s activities. The percentage is negotiable on a case-by-case basis but is expected to average 25% of revenues. In addition, the company may earn minor services revenue from equipment repairs and handling shipping logistics. The company’s hosting customers may supply their own equipment or may purchase the equipment from the company. The company’s hosting customers may select the mining pool that they want to use or use the mining pool that the company uses for its own self-mining.
The company considers these all to be part of the same line of business. The company does not have any fixed goals regarding the percentage of the company’s data centers that the company uses for hosting third party miners versus the percentage that the company uses for self-mining. For mining or hosting equipment that the company purchases, the company also do not have any fixed goals regarding whether the company utilizes the equipment for the company’s own account, sell it to a customer or other third party or contribute it to a joint venture. The company lets market conditions and overall profitability analysis guide the decisions. When the company hosts, the company looks for opportunities to profitably sell miners to the hosting client in a buy/host transaction.
In that regard, the company has an account with Gemini Trust Company, LLC, which is a qualified custodian regulated by the New York Department of Financial Services, to which the company can transfer any digital assets that the company decides to liquidate immediately prior to their liquidation. Assets that the company liquidates through Gemini are generally transferred to Gemini from a cold storage wallet immediately prior to liquidation. The company store a de minimis amount of digital assets at Gemini.
Customers
As of December 5, 2024, approximately 85% of the company’s mining capacity is located at third-party hosting firms and the remainder is located at the company’s leased facilities. The company may enter into contracts with third party miners to use the company’s hosting capacity, in which event the third-party miners are the company’s customers.
Facilities
The company has entered into an agreement with Telecommunications Services of Trinidad & Tobago Limited (‘TSTT’), the largest and oldest telecom company in Trinidad, to co-locate up to 125 800 kw containers for hosting digital asset miners. TSTT has up to 93 potential locations for co-location of the company’s containers. The term of the agreement expires on October 14, 2031.
In light of the recent developments in Trinidad, the company is focusing its efforts in the near term on developing hosting locations in the United States and Canada. The company has a hosting facility in Pecos, Texas, and has an additional 1,095 miners hosted by a third party in Murray, Kentucky.
Hosting Equipment
The company’s focus is to build data centers using immersion hosting containers. Under the company’s agreement with ROC Digital, the company installed one container at the joint venture’s hosting site, which the company is using for self-mining.
Mining Equipment
The company’s principal supplier for miners has been Bitmain Technologies, Ltd (Bitmain).
As of December 5, 2024, the company owned a total of 4,725 miners, consisting of: 121 Whatsminers, 72 Antminer T-19s, and 4532 Antminer S-19s (not including retired miners). The miners that the company owned as of December 5, 2024 have an average mining efficiency of 31.83 j/TH.
History
Bitmine Immersion Technologies, Inc. was incorporated in the state of Nevada in 1995.
