According to a press release issued on October 20 by Sphere3D, the leading bitcoin mining company, which states that it has reduced its purchase of mining machines from BitFuFu. This move was made by companies operating in an industry where businesses are struggling to maintain healthy balance sheets.
Bitcoin is the most widely used cryptocurrency in the world, and its miners are among the most active in the industry, both of which contribute to the cryptocurrency’s growing allure among traders and miners.
However, the fact that there is a limited quantity of bitcoin and that mining it is difficult are two of the primary reasons why it is the most valuable cryptocurrency on a worldwide scale.
Miners of cryptocurrencies like bitcoin have had a tough time in recent months due to the declining price of cryptocurrencies and the rising cost of electricity. The restructuring of their debt and the sale of assets, such as mining equipment, have been among the first steps taken by many. In September, the first major mining company, Compute North, filed for bankruptcy under Chapter 11 of the United States Code.
According to the new terms of the agreement, Sphere 3D has already given BitFuFu a deposit of 106.9 million dollars, which will be used to buy 1.7 exahash/second (EH/s) of machines in the near future. Sphere 3D is no longer required to buy an additional 3.9 EH/s of machines.
The first contract between the parties was finalised in September 2021, and it stipulated that Sphere 3D would purchase 60,000 Bitmain Antminer S19j Pros. Luxor, a company that offers mining services, has collected data that shows the cost of mining hardware has gone down by more than 70% since then.
“The contract with BitFuFu was signed in late 2021 at the height of the bitcoin market as a fixed price contract with no allowances for market price adjustments,” and it was “critical” that the firm was extricated from the contract, said Patricia Trompeter, Sphere 3D’s CEO, in the press release.
According to Sphere 3D’s statement from Thursday, the delivery of the equipment has been “repeatedly delayed” because of the operational concerns with BitFuFu. Because of the reorganization, the delivery schedule has been moved up, and the machines are now expected to arrive in November and be set up in December.
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