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In the continued prosperity of Bitcoin, mining companies are scrambling to mint as much of this currency as possible. But their businesses have been hindered-the covid-19 and China's cryptocurrency blow, and the chaos of the global supply chain.
Specifically, the disruption of global trade and commercial channels has delayed the shipment of "mining machines," which are PlayStation-sized computers that run day and night to mine Bitcoin.
This intrusion of the real physical world into the virtual realm has caused Bitcoin mining companies to rent jets to move their miners, train themselves to repair malfunctioning computers, and wait impatiently for the ports to release their imported machines.
In this crypto bull market, latency is crucial. Charlie Schumacher, a spokesperson for the Las Vegas mining company Marathon Digital Holdings, said: “Miners will miss out on income generation opportunities if they are not online every day.”
For the marathon, 2021 is an important year; by the middle of the year, it had ordered nearly 130,000 mining machines from Bitmain, which is a Chinese manufacturer, shipped the machines out of its factories in Malaysia. Schumacher said that the pre-order proved to be a wise decision. Marathon locked the average price of each machine at around US$3,000, but considering how the value of Bitcoin has soared, orders placed today will reach nearly US$10,000 per machine.
However, bringing these machines to Marathon's factories in Montana and Texas started to become cumbersome. Marathon CEO Fred Thiel said that by the end of summer, miners’ delivery time had been extended to 30 days, almost twice that of spring.
"Global logistics issues are forcing people who traditionally ship by sea to switch high-value goods to air," Thiel said. It is not easy for freight forwarders to find cargo hold on commercial flights. "Another bottleneck is customs processing after arriving at the US airport." Marathon's computer has arrived at Chicago's O'Hare International Airport, which is already full of imported goods.
In October, Marathon began chartering its own plane to fly miners from Malaysia to the United States. "It's like we have become a professional logistics porter," Thiel said. Marathon was also able to fly its flights directly to Dallas, where "Customs has more capacity to handle cargo," he said. "I hope everything will be better in spring. But as long as it makes sense, we will continue to charter flights."
Last year, mining company BitDigital began to transfer its machines from China to sites in the United States and Canada. Sam Tabar, BitDigital's chief strategy officer, said the company seems to have an idea of what is about to happen. In May 2021, when the Chinese government stated that it would ban all cryptocurrency mining, BitDigital still had approximately 20,000 machines in the country. "At that time, we accelerated the migration," Tabar said.
Most of BitDigital's machines have arrived at the company's sites in the United States and Canada. "They are precision machines," Tabar said, "so they have to be packed in Saran Wrap and then packed into crates very carefully. They are not always delivered to us intact. We have to run on every machine Diagnostic procedures, some machines got dust in them or rattled during transportation."
In the perfect storm of supply chain problems, machine migration was severely delayed, some even as long as a month. The last batch of machines—less than a thousand, Tabal said—is still parked on the docks in New York. Tabal said the container had been on the ship for a while and was now on land, waiting to be released.
Tabar pointed out that new machines should not be purchased in a hurry. "The wait next year may continue for a while, and even then there is no promise," he said. "In the field of encryption, that was a long time."
The company also encountered other types of delays. Riot Blockchain, a mining company headquartered in Colorado, hopes to build two new buildings on its Bitcoin farm in Texas, where a technology called immersion cooling will discharge all rotating machinery Heat. Riot Blockchain spokesperson Trystine Payfer said that the initial plan would take 36 weeks to purchase the required steel. Instead, the company chose an aluminum structure made by the Canadian company Sprung, which cuts assembly time in half.
For Hut 8 Mining, headquartered in Toronto, the entanglement in the supply chain forces them to use different creativity. Hut 8’s head of investor relations and corporate development, Sue Ennis, stated that it is no longer feasible to send the faulty mining machine back to the company’s manufacturer MicroBT in China for repair. And since newly purchased machines also take a long time to arrive, it is important to use Hut 8 mining machines that have exceeded its recommended service life of 18-24 months.
"So we became an authorized repair shop for MicroBT-the only one in North America and Europe," Ennis said. Hut 8 can now repair not only its own machine, but also other people's machines. "Our team has now received training to extend the life of these machines, and if promoted, they can even reach five years. If it were not for supply chain issues, we might not be as focused on this as before."
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