Bitfarms Faces Challenges with Bitmain Bitcoin Miners

In July, the mining firm Bitfarms failed to achieve its target hash rate of 12 EH/s due to performance issues with approximately 3,000 new Antminer T21 units from Bitmain.

#Bitfarms Provides July 2024 Production and Operations Update

— Earned 253 BTC in July 2024
— 24.6 BTC/average EH/s
— Added 111 BTC, bringing Treasury to 1,016 BTC
— All five warehouses and eight hydro containers have been fully energized in Paso Pe
— Baie-Comeau expansion to 22… pic.twitter.com/gBfei3OYvd

— Bitfarms (@Bitfarms_io) August 1, 2024

According to Bitfarms CEO Ben Gagnon, the batch was expected to deliver approximately 0.7 EH/s. However, the miners are overheating even at relatively low temperatures. He noted that other units in the series are functioning normally and are not subject to complaints.

“Bitmain will promptly replace the defective devices at their own expense. The new miners are expected to be deployed in three weeks. We are working closely to resolve these manufacturing issues to prevent them in the future, including August deliveries,” Gagnon stated.

Despite the challenges, the firm mined 253 BTC in July, up from 189 BTC the previous month. The operational hash rate at the end of the period was 11.1 EH/s, compared to 10.4 EH/s in July.

The head of Bitfarms noted that the growth is largely due to the full commissioning of the flagship facility in Paso Pe, Paraguay. The construction of all four buildings at the Iguazu site is progressing “rapidly and on schedule.”

Of the bitcoins mined in July, the firm sold 142 BTC for $8.6 million as part of “financial management.” The company’s reserves reached 1,016 BTC, and in line with its HODL strategy, Bitfarms also holds positions in long-term call options on 233 BTC.

The company’s CFO, Jeff Lucas, confirmed that plans to reach a hash rate of 21 EH/s by the end of the year remain in place.

Jack Dorsey Sees Opportunities for Block in Bitmain’s Troubles

Block has the potential to become a leader in the bitcoin mining chip market and capture a significant share. This was stated by the company’s co-founder, Jack Dorsey, during a conference call on the financial results of the second quarter.

Our Q2 earnings are now available. $SQ https://t.co/oGcnRuz7lv

— Block Investor Relations (@BlockIR) August 1, 2024

The entrepreneur described the firm’s entry into the bitcoin mining equipment manufacturing segment as a “huge opportunity.”

Dorsey pointed out Bitmain’s market dominance, noting that the Chinese manufacturer’s products have quality complaints.

“Bitmain produces mining chips and equipment that often fail,” he said, citing feedback from the segment leader’s customers.

He also believes that Block has a technological advantage, utilizing a 3 nm process, whereas Bitmain offers 6 nm chips.

Dorsey also emphasized that Block’s products are open source, allowing miners to adapt them to their own requirements.

In July, the company signed an agreement to supply chips to Core Scientific. The deal was one of the largest in the segment in terms of hash rate — 15 EH/s. Bernstein analysts valued the contract at $300 million, based on market conditions.

Back in March, Bitdeer, founded by former Bitmain co-founder Jihan Wu, tested a bitcoin mining chip SEAL01 using 4 nm technology. In June, the company acquired FreeChain, a developer of ASIC for bitcoin mining.