Cipher Mining Lowers Per-Terahash Cost of Crypto Mining Rigs Even as Quarterly Loss Widens

The miner expects to have 6.9 exahashes per second of computing power deployed by early 2023.

AccessTimeIconAug 9, 2022 at 2:22 p.m. UTC
Updated Aug 9, 2022 at 3:09 p.m. UTC

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Cipher Mining (CIFR) said it lowered its spending on bitcoin mining rigs by about $10 per terahash/second while reporting a second-quarter net loss Tuesday that was wider than its loss in the first quarter.

  • The New York-based company, which became listed in a merger with a special purpose acquisition vehicle last August, posted a net loss of $29 million for the second quarter, compared with a net loss of $17.5 million for the first quarter.
  • The miner has 1.3 exahashes per second (EH/s) running at its 40 megawatt facility in Alborz, Texas, and another 0.6 EH/s of computer power that was en route to two other facilities. Mining rigs will "soon" start shipping to a 205 MW site, its largest, according to the earnings report.
  • The fleet will be running at an efficiency of 32.1 joules per terahash (J/TH) that was bought at an average price of $34.96 per terahash/second (TH/s). That's lower than the $45 TH/s it reported in the first quarter and in line with market pricing. Rigs with efficiency of under 38 J/TH are priced at $35.20 per TH/s, according to information platform Luxor Hashrate Index.
  • Cipher has put down $196.7 million in deposits for equipment, down from $207 million in the first quarter, according to the report. It has mostly paid off its equipment contract with Bitmain for 27,000 rigs, barring a final payment that it plans to cover with a company credit, CEO Tyler Page said during the earnings call on Tuesday.
  • It is now starting to accept deliveries for 60,000 rigs from MicroBT. The miner is in talks with MicroBT to "better align" deliveries with the construction progress of the data center, Page said.
  • Cipher has secured a fixed price of about $27 per megawatt hour (about 2.7 cents per kilowatt hour) for its biggest site in Odessa, Texas, which is significantly lower than competitors in the region, the CEO said.
  • Earlier this year, Cipher cut its 2022 power capacity forecast from 405 MW, including 305 MW for self-mining, to 345 MW, including 275 MW for self-mining. The rest will go to hosting other companies' rigs.
  • The firm has no corporate debt, other than its share of an equipment financing agreement for the Alborz site, which is around $11 million, according to the report.
  • Cipher shares fell 4% in early Nasdaq trading.

UPDATE (Aug. 9 15:09 UTC): Adds "Crypto" to headline.

DISCLOSURE

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

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

CoinDesk - Unknown

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC