Blockstream successfully raised $125 million to help the ailing Bitcoin mining industry that has been struggling to survive. Bitcoin users are financially incentivized through mining to secure the blockchain.
Miners use energy-heavy hardware to construct Bitcoin’s next block. They are rewarded with a fixed amount of 6.25 BTC. When Bitcoin’s market value decreases, the dollar-denominated revenues available to miners also fall. As such, only the most cost-efficient players remain. Now that the leading cryptocurrency graced the high of $23,000, the average miner is able to operate at a profit.
Erik Svenson, Blockstream’s President & CFO, said the latest fundraising will help the company to accelerate the year-over-year revenue growth it created in 2021 Series B. Blockstream will continue to build infrastructure for the future Bitcoin economy. The 2021 raise occurred when the market was heading into its all-time high market capitalization of more than $3 trillion. Svenson said the funds were used to build mining facilities for hosting services wherein customers rent the company’s ASICs to earn Bitcoin from mining for a limited time.
Blockstream said the demand for their hosting services remains high because of the company’s strong track record and substantial scale, amid an industry-wide shortage of available power capacity. With 550 megawatts in its development pipeline, Blockstream is one of the world’s largest mining operators. Its rival firm, Core Scientific filed for bankruptcy in December. And Iris Energy also seems to be facing similar challenges. Blockstream said recent events in the broader cryptocurrency industry underscore the value and importance of the company is doing in blockchain development and Bitcoin mining.
