Bitfarms, a prominent cryptocurrency mining company, has announced plans to expand its mining capacity through a hosting agreement with Stronghold Digital Mining. This strategic move comes amidst ongoing tensions with major shareholder Riot Platforms.
Bitfarms will add 10,000 Bitmain T21 miners to its Panther Creek facility in Pennsylvania, starting on October 1, 2024. This expansion will increase the company’s computing power by 2.2 exhashes per second (EH/s).
Ben Gagnon, CEO of Bitfarms, highlighted the strategic importance of this partnership. The Panther Creek facility offers opportunities for energy trading, competitive power costs, and potential diversification into high-performance computing (HPC) and artificial intelligence (AI).
Bitfarms will pay Stronghold a fee equivalent to 50% of the profits generated from the miner hosting agreement. This contract will be renewed annually unless either party decides to terminate it.
Bitfarms’ acquisition of Stronghold has sparked controversy with Riot Platforms, the company’s largest shareholder. Riot Platforms has issued an open letter to Bitfarms’ shareholders, calling for changes to the company’s board of directors. Riot argues that Bitfarms’ corporate governance is broken and proposes electing two independent candidates to the board.
Riot Platforms has criticized Bitfarms’ acquisition of Stronghold, claiming that it is designed to entrench the current board and dilute shareholder value. Riot argues that competitors were unwilling to purchase Stronghold at the price paid by Bitfarms.
Bitfarms has defended its acquisition of Stronghold, emphasizing that the move is aimed at rebalancing its energy portfolio towards United States-based operations. The company has also dismissed Riot Platforms’ claims, asserting that the proposed board changes are motivated by self-interest.
Bitfarms’ expansion plans and ongoing conflict with Riot Platforms highlight the complexities of the cryptocurrency mining industry. While Bitfarms seeks to grow its operations and diversify its revenue streams, the company faces challenges from within its own shareholder base.
The future of Bitfarms will depend on its ability to navigate these challenges and execute its strategic plans effectively. As the cryptocurrency market continues to evolve, mining companies like Bitfarms will need to adapt to changing conditions and remain competitive.
