Bitcoin Miner Compass to Host 27MW Worth of Mining Rigs at Solar-Powered Startup

Startup miner Aspen Creek Digital has 30MW worth of capacity at its Texas facility, making Compass one of its largest customers.

AccessTimeIconOct 26, 2022 at 11:27 a.m. UTC
Updated Oct 26, 2022 at 12:08 p.m. UTC

Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets

Bitcoin mining hosting and brokerage services firm Compass Mining will place 27 megawatts (MW) worth of bitcoin miners at the Texas facility of solar-powered mining startup, Aspen Creek Digital Corp. (ACDC).

Compass will host about 9,000 Antminer S19 XP and S19j Pro units at the facility on behalf of its clients starting in the fourth quarter of this year, according to a statement. Aspen Creek’s Texas facility has a total of 30MW worth of mining capacity, making Compass the largest hosting client for the start-up miner.

Hosting is a service that data centers provide to crypto miners so that customers can store their mining rigs and mine digital assets for a fee. The service has been a popular way for miners to earn bitcoin rewards without having to sink a large amount of capital to build out infrastructure. However, with high power costs and a crypto winter weighing heavily on the industry, miners have been looking for more reliable and cheaper hosting partners.

“Compass Mining continues to seek out high quality hosting providers such as ACDC that benefit our mining clients uptime and reliability,” co-founder and co-CEO Thomas Heller said in the statement. “ACDC’s pairing of cost effective, renewable energy with mining operational excellence is difficult to find in today’s current market,” he added.

Compass, which allows retail investors to buy small amounts of mining capacity in sites around the world, doesn't own any of the facilities available on its platform.

The move comes after Compass closed two of its Georgia facilities last month, citing higher prices. The Georgia site was hosting about 5,000 machines, or about 15 megawatts (MW), for Compass customers. Compass has had issues with downtime, delays in deployment and mining rigs stuck in Russia, so much so that CEO Whit Gibbs stepped down in June and the new management cut 15% of staff.

Aspen Creek, which was founded in January, recently raised $8 million in a Series A funding, despite the challenging bear market. ACDC was able to distinguish itself from other mining startups by using the “power first” approach, in which the company secured power and infrastructure first for its mining operations before looking to raise money – a contrast to what some other miners have done.

The company’s business model of powering data centers using renewable energy has also garnered the attention of investors as it translates to lower power costs amid the recent spike in power prices for the miners. Its use of cheap and reliable renewable energy as well as its ability to sell excess power back to the grid were key attributes that attracted Polychain Capital, one of the lead investors in Aspen Creek, during its recent fundraise. Financial services company Galaxy Digital also co-lead the funding round.

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Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets

CoinDesk - Unknown

Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets