Bitcoin Mining Middleman Compass' Georgia Facilities to Close as Energy Prices Soar

The company is offering to move approximately 5,000 machines to Texas.

AccessTimeIconSep 1, 2022 at 9:49 a.m. UTC
Updated May 11, 2023 at 4:15 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Two Georgia facilities used by Compass Mining, a middleman that allows retail investors to participate in bitcoin production, are closing as power costs in the U.S. state soar.

The owner of the sites is shutting down because the local utility provider has increased prices, a major cost for bitcoin mining, by more than 50%, Compass co-CEO Thomas Heller told CoinDesk on Thursday by email. The company heard the news from the facility owner yesterday afternoon, he said.

  • Tornado Cash's Alexey Pertsev Sentenced to 64 Months in Prison; Meme Coins Rally
    01:46
    Tornado Cash's Alexey Pertsev Sentenced to 64 Months in Prison; Meme Coins Rally
  • Why Scammers Are Turning to Cryptocurrencies
    00:52
    Why Scammers Are Turning to Cryptocurrencies
  • Three Speakers You Should Not Miss at Consensus 2024
    02:16
    Three Speakers You Should Not Miss at Consensus 2024
  • TradFi Veteran on Why Bitcoin Is Here to Stay
    00:57
    TradFi Veteran on Why Bitcoin Is Here to Stay
  • Compass Mining allows retail investors to buy small amounts of mining capacity in sites around the world. It doesn't own any of the facilities available on its platform. The company has had issues with downtime, delays in deployment and mining rigs stuck in Russia, so much so that Whit Gibbs stepped down as CEO in June and the new management cut 15% of staff.

    The Georgia site was hosting about 5,000 machines for Compass customers, or about 15 megawatts (MW), Heller said. The operator is hosting a total of 8,000 machines, or 25 MW, for Compass, the co-CEO said.

    Customers can have their machines shipped to a site in Texas, a process that's likely take about a month, according to the screenshot of an email to customers posted on social media. Compass will work to minimize the downtime and will issue credits to customers affected, Heller said.

    The Texas facility has experienced troubles of its own. Its connection to the electricity grid was delayed so had to run on generators for a while. Those, however, weren't operating all the time because of heat and other reasons, Heller said, leading to downtime for the mining rigs. In July, Compass offered to move the Texas machines to Georgia because of the site's low uptime. Compass later said it wouldn't proceed with the move, citing the high energy prices in Georgia.

    In August, the Texas site was connected to the grid and uptime has been "very good," Heller said. The facility is expected to run at over 100 MW of energy, but Compass allocation of that will reach only 25 MW by the end of September, according to the screenshot.

    The Georgia facilities were "very solid until now" because the operator was very good. Compass expects the same to hold true for the Texas site, which is managed by the same company, Heller said.

    CORRECTION (Sept. 1, 10:20 UTC) – Corrects number of Compass machines in Georgia facility to 5,000, or 15 MW; clarifies power allocation for Texas site.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Eliza Gkritsi

    Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.