DigitalBTC has inked a strategic hardware supply agreement with BitFury, one of the leading manufacturers of bitcoin mining equipment.
The company is owned by Australian investment firm Macro Energy, which acquired Digital CC and its subsidiary digitalBTC last month. Thanks to the acquisition, the firm became the first bitcoin-related business to be listed on the Australian Stock Exchange (ASX).
At the time Macro Energy said it plans to raise AU$9.1m and to invest the money in the expansion of digitalBTC operations, including bitcoin mining. Soon after digitalBTC entered a strategic partnership with CloudHashing.com.
Under the terms of the agreement CloudHashing.com software will be deployed on digitalBTC hardware, which will also be managed by CloudHashing.com. The hardware will apparently be installed in CloudHashing.com data centres in Iceland and Texas.
The companies pointed out that the deal is a win-win situation for all parties – digitalBTC gets valuable expertise on the technical issues of the business, while CloudHashing.com gets access to digitalBTC’s trade desk.
DigitalBTC’s Executive Chairman Zhenya Tsvetnenko said the partnership will allow digitalBTC to concentrate its resources on retail-focused mobile applications and other operations.
CloudHashing.com CEO Emmanuel Abiodun told CoinDesk that the relationship is mutually beneficial and that he is pleased to team up with digitalBTC, which has strong capital backing and a proven track record in bitcoin trading.
Abiodun added that CloudHashing.com expects to generate $7.5m-$10m worth of bitcoins a month.
DigitalBTC has not shared much detail about the BitFury deal, nor did it mention CloudHashing.com. However, the company did state that the first instalment of the new bitcoin mining hardware is already in operation and started generating revenue in March.
The revenues will be used to fast-track the development of digitalBTC’s retail products. The company stressed that retail products are a key focus for its business model. There is still no word on the precise quantity and type of hardware ordered by digitalBTC, but the company did say that the first batch cost $2m.
“Under this agreement, BitFury will supply a significant quantity of its most advanced bitcoin mining hardware to digitalBTC, backed by manufacture assurances. This will significantly advance digitalBTC’s bitcoin mining capacity,” the company said.
DigitalBTC points out that about 40% of the bitcoins so far produced were mined with BitFury chips. Furthermore it states that the hardware it acquired has secured it a “significant proportion” of the current bitcoin mining network, thus making digitalBTC one of the largest bitcoin mining operations in the world.
The first installation of new BitFury hardware has earned digitalBTC more than 680 bitcoins since it was deployed, earning the company $330,000 during its first 13 days of operation between March 20th and April 2nd.
“DigitalBTC has committed to two tranches of hardware – this first installation of $2m of state-of-the-art bitoin mining hardware that is currently in operation, and a second tranche planned to be delivered and operational in May 2014.”
Tsvetnenko said the agreement is backed by “attractive” manufacturer guarantees and that it allowed digitalBTC to quickly expand its mining capacity. Furthermore, the company plans to continue expanding its bitcoin operations, including mining, trading and consumer focused retail applications.
“The bitcoin system continues to rapidly mature, evident by significant backing from very large investment firms. Bitcoin focused investment funds of approximately $150m in capacity are now being formed. In addition, there has already been in excess of $100m of investments made into the bitcoin system. This magnitude of investment is set to drive bitcoin into ever wider acceptance and use.”
Tsvetnenko said the next step is to enable development of the consumer-friendly software and applications that the system needs. DigitalBTC plans to be a contributor to this retail push, he explained, through its consumer-oriented retail applications.