Riot Platform, formerly known as Riot Blockchain, is a publicly traded cryptocurrency mining and blockchain technology company specializing in Bitcoin infrastructure. In addition, the company offers data center hosting of cryptocurrency mining equipment for institutional clients through its wholly owned subsidiary, Whinstone US, Inc. Riot Platform operates one of the most significant Bitcoin mining operations in North America. Riot platform currently deploys a hash rate capacity of 4.6 EH/s using approximately 136 megawatts (MW) of energy.
Although Riot Platforms, Inc. operates as a Bitcoin mining company the Company focuses on buying cryptocurrency and blockchain businesses, as well as supports blockchain technology companies. The company dropped Blockchain from its name after shares tumbled 85% last year as crypto winter set in. Riot Blockchain Inc. has changed its name to Riot Platforms as the Bitcoin miner seeks to navigate the battered crypto landscape by diversifying operations.
Company history and background
Founding and headquarters
Riot Platform, based in Castle Rock, Colorado, operates a large-scale bitcoin mining and hosting facility in central Texas. The company started in October 2017 when Bioptix, a biological sciences technology firm with one registered veterinary patent, changed its name to Riot Platform and announced a pivot from veterinary drugs and medical technology to blockchain. Nasdaq has listed Riot Platform shares.
Expansion of operations
The company is expanding and upgrading its mining operations by developing industrial-scale infrastructure and gaining the latest-generation miners. Riot Platform operates a 750 MW facility in Rockdale, Texas, North America’s most significant Bitcoin mining and hosting facility. The company also plans to expand its capacity by another 400 MW in Corsicana, Texas, which could use enough power to light up over 200,000 homes. Riot Platform currently has a deployed hash rate capacity of 4.6 EH/s using approximately 136 MW of energy and expects to increase it to 12.6 EH/s by Q1 2023, with additional miners scheduled for delivery and deployment.
Mining Operations
Bitcoin mining is verifying and adding new transactions to a blockchain. The process requires computers or miners to solve complex mathematical equations, and successful ones earn newly minted bitcoins. The hash rate in Bitcoin mining is the number of calculations that can be performed by a miner each second. With a higher hash rate, the chances of getting Bitcoin rewards increase. Riot Platform focuses on increasing its hash rate and infrastructure capacity, partly by acquiring the latest generation of miners to increase its efficiency and performance.
Riot’s mining infrastructure and equipment
Riot has been ballooning its mining infrastructure and equipment in recent years, reinforcing its position as one of the leading cryptocurrency miners. By 2023, Riot expects its total self-mining hash rate to reach an astonishing 12.6 EH/s, with a fleet of approximately 116,150 state-of-the-art S19 series miners. This massive deployment will require around 370 MW of energy to power it. The company is also harnessing the latest immersion-cooling technology, which could increase productivity gains. Riot provides 200 MW of additional capacity for institutional Bitcoin mining clients. Seeing how these ambitious plans play out for Riot in the coming months will be exciting!
Whinstone subsidiary
Whinstone US, Inc., a wholly owned subsidiary of Riot Platform, offers data center hosting services for institutional clients. Whinstone’s state-of-the-art facility is in Rockdale, Texas, and provides high-performance mining capabilities to its clients. The company can host over 10,000 miners. The Whinstone facility is undertaking an ambitious expansion project that seeks to double the current Bitcoin mining capacity of the site nearly. Among the goals of the project are new buildings and a total build-up area of 240,000 sq ft., adding 400 MW of power to the 750 MW goal.
They scheduled all components associated with the expansion in parallel with miner shipments. With these upgrades standardized and applied, the Whinstone facility will be globally recognized as the top name in Bitcoin mining, leading to maximum developed capacity.
Whinstone is committed to providing its clients access to a secure mining environment featuring operational support, maintenance, and repair services.
The company has also implemented an advanced energy management system that reduces the cost of electricity while keeping temperatures low, allowing them to provide clients with an efficient and cost-effective hosting service.
Corsicana
Riot Platform will make a massive move in the Bitcoin mining sector with their plans for a large-scale, 1-gigawatt development in Navarro County, Texas. The one-year project has begun with the construction of an initial 400 megawatts of capacity on a 265-acre site. Its immersion-cooled mining and hosting operations will start being operated by July 2023.
The Expansion includes land acquisition and preparation and related ancillary buildings needed for its completion. An estimated investment of $333 million will be put forth until the first quarter of 2024 to fund the Expansion phases.
Completing the first 400 MW phase of the Expansion is a huge milestone, but their plans don’t end there. Thanks to the 345 kV Navarro switch located only 1,250 feet from the site, they will expand capacity to an astounding 1GW. This additional 600MW would be a significant benefit to our business.
Riot 2022 financial and operational highlights
- Riot made a total revenue of $259.2 million compared to $213.2 million in 2021, driven by higher Bitcoin production and a full year of Data Center Hosting and engineering revenues.
- They earned $27.3 million in power credits through the support of the ERCOT grid in Texas. The amount of power credits earned equated to 1,815 Bitcoin.
- They produced 5,554 Bitcoin, compared to 3,812 in 2021, a 46% increase.
- Their Bitcoin mining revenue rose to $156.9 million, compared to $184.4 million in 2021. Lower values of Bitcoin drove the decrease in Bitcoin Mining revenue in 2022.
- Their data center hosting revenue rose to $36.9 million, compared to $24.5 million in 2021, primarily because of Whinstone’s acquisition in May 2021.
- Engineering revenue of $65.3 million was obtained primarily because of the acquisition of ESS Metron in December 2021.
- Reported a net loss of $509.6 million, significantly affected by non-cash impairment charges totaling $538.6 million, including goodwill impairment of $335.6 million associated with the Whinstone and ESS Metron acquisitions in 2021.
- They maintained $321.8 million in working capital, including $230.3 million in cash, no long-term debt, and 6,974 Bitcoin produced by the Company’s self-mining operations.
- Ended the hosting agreement at Coin Mint LLC’s Massena, NY facility and moved all miners to the Rockdale Facility, improving Riot’s mining revenue margin through reduced power costs and eliminating third-party hosting fees.
- Riot’s cost to mine Bitcoin for 2022 averaged $11,225 per Bitcoin versus $11,939 in 2021, a decrease of 6% year-over-year.
- Increased hash rate capacity by 213% to 9.7 EH/s as of December 31, 2022, compared to 3.1 EH/s as of December 31, 2021.
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Conclusion
Riot Platform has rapidly grown to become one of the largest Bitcoin mining companies in the United States. The company’s goal is to support the Bitcoin blockchain through industrial-scale infrastructure development, and it has made substantial investments in large-scale mining operations across the country. The 1-gigawatt CORSICANA expansion in Texas will be the largest of these projects, providing 400 MW of capacity in its first phase and an additional 600MW in the future. Riot already earned financial and operational highlights in 2022 with total revenue reaching $259.2 million, Bitcoin Mining revenue of $156.9 million, Data Center Hosting revenue of $36.9 million, Engineering revenue of $65.3 million, and a total hash rate capacity of 9.7 EH/s. As Riot strives for industry leadership in Bitcoin mining, investors and stakeholders should closely monitor its progress.
