Once known as the largest Bitcoin mining firm in the world, GigaWatt recently filed for bankruptcy. The filing paperwork included an outline of just how poorly the former mining conglomerate fared in the current market. Their debt exceeds $7 million USD – while their current assets are less than $50,000 total. This severe disparity is a direct result of crypto-crash and an inability to shift gears in the face of a prolonged bear market.
GigaWatt is not the only casualty of the current market, as communities grow increasingly hostile to the severe power costs of cryptocurrency mining. Locations that enjoyed cheap hydroelectric power found Bitcoin miners flooding in throughout 2017. Most welcomed the new businesses – until their power bills suddenly spiked. One such community went as far as to ban mining outright, as some residents found their electricity bill increasing by triple digits.
GigaWatt is First-In and First-Out
Unfortunately for GigaWatt, their woes are not entirely restricted to the digital realm. They led the cryptocurrency mining revolution – and their aggressive plans helped bring them to ruination. Envisioning a massive mining compound in Washington state, GigaWatt intended to lease out mining space to other firms. Investors poured money into the project, but the mining space has yet to materialize.
Several of these investors are entwined in a legal battle with GigaWatt, while local officials are still hopeful that the space will ultimately be completed. Construction has lagged over the past year as the price of Bitcoin remained suppressed and GigaWatt fully suspended operations last month. Further, they laid off 4/5 of their work force in one fell swoop. As of now, their only real revenue stream is a bank of miners that are barely turning a profit.
State of the Cryptocurrency Mining Industry
GigaWatt’s claim to the ‘largest cryptocurrency mining firm’ fell in the wake of BitMain’s rise. The China-based mining juggernaut vastly outpaced their American competition – but now they are suffering many of the same issues. As Bitcoin’s price drops, even BitMain’s economy of scale is slipping towards becoming unprofitable. They are shedding older equipment as fast as they can sell it.
Worse, their customers are increasingly unwilling to deal with their controversial practices. A massive lawsuit alleges that BitMain’s retail ASIC mining equipment intentionally took excessive time to configure – and used that time to mine cryptocurrency for BitMain rather than the client. If Bitcoin doesn’t rally soon, we may see a return to the days of hobbyist miners – if only because industrial scale miners will be driven out of business.
Article By: Adam Stone