With Bitcoin's highly anticipated “halving” event just 6 months away, Canada-based Bitcoin mining firm Iris Energy has announced another major expansion in its computing fleet.
On Friday, the company confirmed that its total hashrate has increased by 25% from 5.6 exahashes per second to 7.0 EH/s, adding 7,000 of Bitmain's new S21 miners to its fleet. The addition cost the company $19.6 million.
“The acquisition is expected to be funded from existing sources of capital, including cash in the bank (~$64 million, no debt), cash flow and other recently announced financing programs,” the company said in a press release.
“Hashrate” refers to the number of hashes or guesses you generate to solve the complex mathematical problem required to create the next block of Bitcoin. An ekhash is equal to one quintillion hashes.
The first miners to build each block are rewarded with newly mined BTC. The faster miners can produce hash, the more BTC they earn, and the more revenue they generate. Therefore, increasing the hashrate increases the chance that a company will win that competition every time a new block is created on the network.
Following the announcement, shares of Iris, which trades on NASDAQ under the symbol IREN, rose 9.5 percent.
In June, Iris announced plans to expand its capacity to 9.1 EH/s by early 2024. That target has now dropped to 9.4 EH/s, with the company “continuing to monitor the market for additional hardware acquisition opportunities.”
After the machines are shipped in early 2024, mining economics are expected to change significantly, with a halving in April 2024. The halving is a regularly scheduled event that will reduce the BTC rewards given to miners per block from 6.25 BTC to 3.125 BTC.
On the one hand, this could make mining an unsustainable business, meaning that only the most cost-effective firms can compete in the industry. On the other hand, many see the halving as a boost to Bitcoin bull markets, ultimately making the industry more profitable in dollar terms.
Other major mining companies, including Blockstream, Riot, CleanSpark and others, have announced major expansion plans this year, often with clear reference to Bitcoin's halving. CleanSpark CFO Gary A. Vecchiarelli said in June when he announced the $9.3 million expansion: “We will continue to take advantage of opportunities created by current market conditions to prepare for next year's Bitcoin halving.
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